One-in-eight UK pubs are at risk of closure following Rachel Reeves’ tax reforms, damning new analysis has revealed.

The research also found that 4,742 establishments currently operate with negative net assets, compared with 4,154 twelve months ago, a rise of fourteen per cent.

Britain’s pub sector has recorded its most severe period of closures in more than ten years, with 408 establishments shutting permanently between April and September 2025, according to fresh analysis.

The figures reflect the sharpest decline in trading since records began, following fiscal changes introduced in April.

Accountancy firm Price Bailey examined the UK pub estate of 37,045 venues before concluding closures had accelerated significantly after spring.

In the first quarter of 2025, 163 pubs closed, meaning the pace more than doubled in the months that followed.

June alone saw 84 pub insolvencies, representing the highest monthly total in over a decade.

Analysts said the timing coincided with new Government tax and wage measures.

The Chancellor’s April tax reforms introduced a rise in employers’ National Insurance contributions to 15 per cent, up from 13.8 per cent, while the threshold for payments was lowered from £9,100 to £5,000.

Industry groups say the change increased payroll taxes for pub operators on more staff and lower wage levels than before.

The National Living Wage also rose to £12.21 per hour for workers aged over 21, with those under 21 receiving £10.00 per hour.

Many pub owners have reported a significant hike in their operational costs as a result.

Price Bailey’s research said the timing of closures suggested pubs operating with slim margins were unable to absorb increased costs.

The firm noted that venues already under strain after years of economic challenges faced immediate pressure from the additional financial requirements.

The analysis also highlighted a rise in the number of pubs technically insolvent.

Matt Howard, head of insolvency and recovery at Price Bailey, said: “One in eight pubs are now both technically insolvent and rated maximum risk. These businesses are likely to face winding-up petitions or dissolution notices within the next twelve months.”

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Mr Howard added that the sector faced a combination of increased operational costs and reduced discretionary spending among customers.

He explained: “Tax rises are eroding disposable income, leaving households with less to spend on leisure. That means rising costs on one side and falling footfall on the other.”

Trade body UKHospitality has forecast that 111,000 jobs could be affected across the wider hospitality industry by November’s Budget.

It is also estimated that policy changes would add £2.9billion to business costs this financial year.

The reduction in the National Insurance threshold has resulted in additional liabilities for an estimated 774,000 part-time and flexible roles previously below the threshold.

Kate Nicholls, chief executive of UKHospitality, warned: “Hospitality is being taxed out and the sheer scale of cost increases hitting the sector is forcing businesses to make tough decisions to cut jobs, raise prices, slash investment and reduce hours.”

Ms Nicholls said the industry wanted to work with ministers to support recovery.

She said: “We stand ready to work together on solutions that can reverse the damage already done and help hospitality thrive, not just survive.”

Closures have affected pubs and wider hospitality venues, including large restaurant chains.

Since October 2024, more than 1,100 pubs and restaurants have closed permanently, with around two venues shutting every day.

Several well-known operators have entered administration.

TGI Fridays entered administration in October 2024, closing thirty-five sites while fifty-one were acquired by private equity.

Pizza Hut closed sixty-eight dine-in restaurants during the same period, resulting in 1,210 job losses.

Earlier closures included Byron Burger’s administration in January 2023, which led to two hundred job losses, and the Restaurant Group reducing Frankie & Benny’s and Chiquito locations.

Other brands that have shut sites include Prezzo and Tasty, the owner of Wildwood.

Industry analysts say the pattern indicates that even larger operators have struggled with rising costs and shifts in consumer spending.

Economists note that the hospitality sector has faced multiple pressures including energy prices, supply costs and wage increases.

They add that additional tax liabilities have combined with reduced consumer spending power, creating challenging trading conditions.

The Treasury has not commented on potential support measures for the sector ahead of the budget.

Officials have said that all policy decisions will be announced in due course.

Industry bodies continue to call for reform of business rates and targeted tax relief.

They argue that pubs play an important role in community life and local economies across the UK.

Hospitality groups say clarity will be essential for planning and investment in the months ahead.