UK Pubs Closures and What Landlords Can Do

Introduction – Why Closures Are Rising

The Great British pub is facing its toughest challenge in living memory. According to the British Beer and Pub Association (BBPA), more than 370 pubs are expected to close their doors in 2025, marking a troubling increase on the 350 that shut in 2024. That equates to more than one closure every day. Behind each one lies lost jobs, broken community ties, and shuttered local economies.

At Accounting Solutions Manchester, we work closely with hospitality businesses across Greater Manchester and beyond, and we’re seeing the same story echoed time and again: rising costs, reduced margins, and mounting pressure. But the future isn’t fixed, pub landlords who understand what’s coming can take decisive action to turn things around. See our article on the Dockyard Pub that’s built upon its current success.

In this article, we explore why UK pubs are closing, what the future looks like, and most importantly what measures pub owners and managers can take to safeguard their business.

The State of the Pub Industry in 2025

The numbers paint a stark picture. Since the early 2000s, the UK has lost over 15,000 pubs. In 2024 alone, more than 400 establishments closed their doors permanently. The BBPA now warns that this trend will accelerate through 2025, driven by a dangerous combination of tax pressures, utility costs, and changing consumer habits.

And it’s not just the buildings. Each closure represents lost local jobs, strained supply chains, and a diminished sense of community. As the BBPA has said, “These are not just businesses—they’re community assets.”

What’s Driving Pub Closures?

1. Rising Business Rates

From April 2024, business rates relief for hospitality venues was slashed from 75% to 40%. For the average pub, that’s an additional £12,000 per year in fixed costs. For many landlords, that shift alone has tipped already tight margins into the red.

2. Higher Taxes on Beer and Staffing

Pubs are now paying 20% VAT on food and drink, plus a beer duty rate almost three times higher than many of their European counterparts. Meanwhile, National Insurance increases and rising minimum wages have added an average of £614 per staff member to annual payroll costs.

For many pubs with 10–15 employees, that’s an unplanned five-figure jump in annual costs.

3. Energy and Utility Costs

The energy crisis of 2022–23 hasn’t disappeared. While prices have stabilised, they remain around twice pre-crisis levels. Many pubs now face annual gas and electricity bills exceeding £18,000, with no support scheme in place.

4. Extended Producer Responsibility (EPR)

A newer pressure comes in the form of EPR recycling charges. These new fees, linked to glass and packaging waste, are adding further operational costs that hit smaller independent pubs hardest.

5. Shifting Habits

Perhaps the biggest long-term challenge is behavioural. Younger generations drink less, more people stay home, and supermarkets offer cheaper alcohol than pubs can match. Traditional models reliant on Friday and Saturday night trade are struggling to adapt.

What’s the Government Doing?

The British Beer and Pub Association, which represents over 20,000 UK pubs, is pushing hard for reform. They’re calling on the Government to:

• Reinstate or increase business rates relief
• Freeze beer duty beyond 2025
• Provide targeted energy support for hospitality
• Reform VAT for food and drink
• Mitigate the impact of EPR and employer NIC rises

At present, however, no major policy shift has been confirmed. That means pub landlords can’t afford to wait—they need to take proactive steps now.

How Pub Owners Can Protect Their Future

Despite the challenging landscape, many pubs are thriving by doing things differently. Here are six proven strategies to futureproof your pub business in 2025 and beyond.

1. Diversify Your Revenue

Relying solely on beer sales is no longer viable. Pubs that thrive are finding new income streams:

• Food menus: Even a simple gastropub-style menu can double average spend per guest.
• Events: Live music, quiz nights, book clubs, wedding hire, and football screenings can draw regular crowds.
• Coworking spaces: Offer Wi-Fi, plug points, and coffee for daytime trade.
• Accommodation: Spare rooms can be converted into letting space or Airbnb-style offerings.

2. Manage Overheads More Efficiently

• Switch to fixed-rate energy contracts where available
• Use LED lighting and smart meters
• Insulate kitchens and cellars to reduce heating and cooling costs
• Join purchasing cooperatives for bulk savings on beer, food, and cleaning supplies

These savings might feel small at first—but when margins are tight, they make all the difference.

3. Optimise Your Staffing

Many pubs overstaff on quiet shifts or retain schedules set during busier pre-pandemic times. Instead:

• Use timesheet apps to analyse peak hours
• Consider flexible part-time roles instead of full-time contracts
• Train staff to cover multiple roles

Also, make sure you’re claiming any Employment Allowance or tax reliefs available to your business. If you’re unsure, speak to an accountant familiar with the hospitality sector—we can help.

4. Negotiate Fair Leases and Rents

Many pub tenants operate under tied leases with large pub companies. The Pubs Code Regulations 2016 gives tied tenants the right to request a Market Rent Only (MRO) option. If your tied agreement is hurting your bottom line, it’s worth exploring whether an MRO agreement could cut costs.

Likewise, annual rent reviews should always be compared to turnover. If your trade has dropped but rent hasn’t, you could be overpaying.

5. Engage the Community

Pubs that are embedded in their local area tend to survive longer. Use social media to share updates, host charity nights, sponsor a local sports team, or partner with other small businesses nearby.

Some pubs have even transitioned to community-owned models, raising money via local investment. If your pub is a true local institution, your regulars may be more willing to help than you think.

6. Promote What Makes You Unique

Competing with supermarket beer is a losing battle. Instead, focus on the experience your pub offers:

• Local or craft ales
• Heritage buildings or historic décor
• Family-friendly spaces and safe play areas
• A warm, welcoming environment that’s more than just a bar

What Happens If Nothing Changes?

If current trends continue, the UK could lose more than 4,000 pubs by the end of the decade. The impact on rural areas would be devastating, with entire villages losing their only communal venue.

It’s not just a hospitality issue, it’s a social one.

Inaction means more than lost profits. It means reduced footfall for nearby shops, more empty properties on high streets, and fewer places for people to gather, celebrate, or mourn.

Our Advice for Pub Landlords

If you run a pub and you’re concerned about rising costs, changing rules, or dropping turnover, the best thing you can do is take early action.

At Accounting Solutions Manchester, we support dozens of local hospitality businesses with:

• Cashflow forecasting and cost analysis
• Business rates reviews and appeals
• VAT and beer duty calculations
• Payroll and staff cost modelling
• Business restructuring and support with lease reviews

We can help you understand exactly where your money is going—and how to hold onto more of it.

Don’t Wait for Last Orders

The British pub sector is at a crossroads. While closures are expected to continue through 2025, they’re not inevitable. With the right financial advice, efficient operations, and creative thinking, independent pubs can adapt—and even thrive.

If you’re a pub landlord and want to build a stronger, more resilient business, speak to our team today.

How We Can Help?

With over 20 years’ experience supporting limited companies across Manchester and the North West, Accounting Solutions Manchester takes the stress out of meeting your Companies House deadlines. We understand that missing a filing, even by a day, can lead to unnecessary penalties and reputational risk. Our proactive approach helps ensure you stay organised, compliant, and penalty-free.

Let’s help you reduce tax, increase profit, and save time, so you can focus on what matters most: keeping the heart of your community alive.

We offer end-to-end support for all your statutory responsibilities, including:

• Limited company accounts – Preparation and filing of your annual accounts in full compliance with Companies House and HMRC requirements.

• Corporation tax returns – Accurate calculations, early reminders, and on-time submissions to avoid interest charges or late filing fines.

• Tailored support for directors – From personal tax returns to dividend planning, we’ll help you manage your director obligations too.

• VAT returns and advice – From VAT registration to accurate return filing, we ensure you meet Making Tax Digital (MTD) requirements and stay compliant with HMRC deadlines.

• Bookkeeping services – Keep your records up to date with reliable, cloud-based bookkeeping that gives you real-time visibility and helps streamline your year-end accounts.

• Self-assessment tax returns – We handle personal tax returns for directors and shareholders, including dividends, PAYE income, and other earnings.