Labour accused of ignoring warnings over tax raid on pubs: Pub bosses have criticised Labour ministers for failing to heed warnings about a Budget tax raid hitting venues with sky-high bills. A change to business rates by Rachel Reeves at her second Budget last month has punished pubs with a significant increase in their property tax bills, putting further pressure on the struggling sector. Hospitality chiefs claim they told Sir Keir Starmer’s government last summer that changing the tax calculations would leave pubs with higher bills – but say ministers ignored their warnings, reports The Telegraph. Pub’s property tax bills are calculated using a complex formula, which includes how much their profits have grown over a certain period. Because the new bills were calculated using data from the covid period – when the lockdown led to wild upswings in pub profits – the tax base known as a rateable value has surged dramatically. An impact assessment on the tax rates published alongside the Budget made no mention of the pubs’ warnings – prompting further anger from the industry. Allen Simpson, chief executive of trade body UK Hospitality, said: “The government knew months in advance that rateable values for hospitality businesses were set to increase significantly. We warned that only the maximum 20p business rates discount would be enough to deliver lower bills. The government chose not to heed those warnings.” Sacha Lord, chair of the Nighttime Industries Association, said: “It’s just common sense. During lockdown, we were the first to close and the last to open. They must have discussed this internally for it to come out on the same day. They knew what they were doing.” Tax consultants also say they had flagged the issue to ministers when Labour came to power in July 2024. Alex Probyn, from tax firm Ryan, said: “This is not a case of a government failing to ‘spot’ a spike; it is a structural outcome of the way the statutory valuation process works with fixed valuation dates. But was entirely foreseeable. We had been warning of this for 18 months in the run up to the publication of the draft lists.” Analysis of 39,000 pubs by Ryan found the average rateable value jumped by 30pc to £40,245. The revaluations, combined with the removal of 40pc pandemic-era tax relief, mean pubs will see substantial tax rises, the firm warned. Labour is separately consulting on an overhaul to the way properties are valued, but Probyn said the results would come “far too late” for some pubs. He said: “By then, the damage may already be done. Airports, hotels, utilities, major leisure assets and visitor attractions will spend three full years exposed to a valuation methodology the courts have already questioned.” A HM Treasury spokesman said: “We are delivering long overdue reform to rebalance the business rates system in favour of the high street, with the first ever permanently lower business rates tax rate for eligible retail, hospitality and leisure properties. We have also set out the next phase of business rates reform, publishing a Call for Evidence on how to remove further barriers to investment that includes exploring concerns about the impacts of the receipts and expenditure methodology.”