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This fact sheet covers England & WalesYou will need different advice if you live in Scotland.

This fact sheet explains how you can deal with the most common debt and trading problems that publicans face. It does not replace any terms and conditions, or code of practice, that your landlord may have provided.

Use this fact sheet to:

  • understand the lease agreement for your premises;
  • find out what a 'beer tie' is;
  • see how to deal with common types of debt; and
  • find out about further help that may be available.

Leases and tenancies

When you first took over your pub, you may have signed a lease. A lease is a long term agreement between you and the landlord. It makes you liable to pay the rent on the premises for a number of years. Most leases are between 5 and 25 years long. If you are a leaseholder, you do not own the premises. However, you are responsible for keeping them in good condition.

You have to pay the rent to the landlord. If other people have signed the lease with you, they are equally liable to pay the rent. This is known as ‘joint and several liability’. If you signed the lease in the name of a limited company, you may have given a personal guarantee. A personal guarantee makes you personally liable to pay the rent if the company stops trading.

Some leases contain ‘break clauses’. This means that you can leave the business premises early if things are not going well. If you are unsure whether your lease contains a break clause, ask a solicitor to look at the agreement. They will charge you fees for their services. Business Debtline can help you to find a solicitor. Contact us for advice.

Tenancy agreements are usually shorter than leases. They normally last for between one and five years. You have low security with a tenancy. This is because the landlord does not have to renew your tenancy when it ends. You will usually be responsible for keeping the premises in good condition. Some pub companies offer a ‘tenancy at will’. This type of tenancy does not have a fixed term and can be ended either by you or the landlord at short notice.

For help negotiating

The Royal Institute for Chartered Surveyors (RICS) can offer advice and help you to negotiate with your landlord at rent reviews. Go to for more information.

Rent reviews

If you are a leaseholder, the lease will state how often the rent will be reviewed. Some leases state the rent can only be increased when it is reviewed. The landlord may agree not to increase the rent. In limited circumstances, for example if you are in extreme hardship, they may agree to lower the rent.

Under most tenancies, the rent is reviewed each year. The landlord will usually take into account the ‘retail price index’. This is a measure of how the cost of goods and services has increased over a certain period.

Rent arrears

If you fall behind with your rent, contact your landlord straight away. Larger pub companies have credit control departments. They should work with you to help you clear the arrears as quickly as possible. Complete a budget and give them full information about your financial circumstances. This will help them to make a fair decision about how much time you need to pay what you owe.

Remember, it is often in your landlord’s interests to keep you in your pub so that the rent is being paid. If you are experiencing financial difficulty, don’t be afraid to talk to your regional manager to see what other help they can provide.

If your rent is late

If you do not pay your rent on time, the landlord could send bailiffs to seize your goods. They can do this without a court order. Also, the landlord could end your lease or tenancy. In practice, these actions are rare. Contact us for advice.

The beer tie

Under most tenancies and leases, you have to get your supply of beer from the landlord. This is known as ‘the beer tie’. Your tie might be for beer only, or it could be for all of your drinks. If you do have a beer tie, it is important that you do not purchase your beer from another supplier. If you do, you are in breach of your lease and the consequences can be serious. Pub companies can easily tell if you have been buying your supplies from elsewhere. They can do this by using flow meters on your beer lines. The regional manager may also make regular inspections of your cellar. Large pub companies have unique markings on barrels and bottles.

If your pub is ‘free of tie’, you are free to purchase your products from wherever you want. However, the rent will usually be higher.

The Pubs Code

The Pubs Code etc Regulations 2016 (The Pubs Code) was introduced 21 July 2016. It says how large pub owning businesses that own 500 or more tied pubs should deal with you if you are a tied tenant. For example, they should:

  • not use a flow meter alone to decide that you are buying tied goods from elsewhere if they impose penalties for this; and

  • not create a new tenancy or renew an existing one that forces you to buy or rent gaming equipment.

The Pubs Code also gives you the right, in certain circumstances, to ask for a free from tie tenancy. This would allow you to choose where to buy your beer and supplies from. This is called a 'market rent option' and will usually increase your rent. This is a complex area and you may need legal advice. Contact us for advice.

The Pubs Code also created a Pubs Code Adjudicator who can look at whether The Pubs Code has been applied properly. If you are unhappy with how your landlord has dealt with you, then you will usually need to try and resolve the matter with them first. If you are still unhappy with the outcome you may be able to refer a complaint to the Adjudicator. There is a fee for this. See the Adjudicator's leaflet Pubs Code: disputes for more information. You can also call or email the Adjudicator’s office to discuss the matter. See Useful contacts. You can also contact us for advice.

Debts to HM Revenue & Customs

It is important that all taxes due to HM Revenue & Customs (HMRC) are paid on time. HMRC take late payment very seriously and can be quick to take further action against you. Also, even if you have an accountant, it is still your responsibility to make sure that your tax returns are sent to HMRC on time.

If you are in temporary financial difficulty, contact HMRC as soon as possible. They may agree to enter into a short-term payment arrangement with you. See Useful contacts towards the end of this fact sheet.

Further support

Taxaid are a charity who can provide free advice and support to people who cannot afford to pay a professional adviser. For more information, see


Gas, electricity and water bills are priority debts because if you don’t pay them, your business supply can be disconnected. Most licensed premises have living accommodation attached. This means that both your home and business supplies could be cut off if you have gas or electricity arrears. Disconnection should always be a last resort. Utility companies have credit control departments. They should try to work with you to negotiate a payment plan for your arrears. They would usually require a payment to cover your ongoing use, plus an amount towards the arrears so that they are cleared in a reasonable period of time.

Your home cannot be disconnected from its water supply. If you have water arrears your water supplier would only be able to disconnect your business premises. They must make sure that your home still has a supply.


If you have a dispute with your utility provider, try to resolve it with them first. If this is not successful, Citizens Advice consumer helpline may be able to help. You can contact Citizens Advice consumer helpline on 0808 223 1133, or go to

The process for renewing business gas and electricity supplies is a major cause of complaints. As the end of your contract approaches, the supplier will send you a renewal notice. If you don’t act on this notice, you could end up tied into a more expensive contract which is difficult to get out of. UK Power is a price comparison site that could help you find the cheapest energy supplier for your pub. For more information, go to

Business rates

All business premises have to pay business rates to the local council. Business rates arrears are a priority debt because the council has strong powers to collect the money owed. As soon as you find yourself in financial difficulty, speak to the council and provide them with a copy of your budget. Make a proposal to clear the arrears. Start paying what you can afford.

If you fall behind with your business rates, the council can ask the magistrates’ court to make a liability order. A liability order confirms that the business rates are due and have not been paid. After a liability order has been granted, the council may use bailiffs to try to recover what you owe. Bailiffs do this by trying to seize your goods and possibly sell them to raise money to pay the debt. They can attend your business, your home or anywhere that they believe your goods are held. These bailiffs must be ‘certificated’. This means that they must have a certificate from the County Court which allows them to act as bailiffs.

If bailiffs have not yet been into your home or business premises to collect a debt, they have no right to force their way in. They cannot break in. Do not let the bailiffs in.

Business rates relief

Make sure you are getting any business rates relief that you are entitled to. There are several schemes available. Each scheme has its own set of rules. For more information on business rates relief, contact your local council or go to:

  • and search for ‘Business rates relief’ if your business is based in England; and
  • and search for ‘Business Rates Relief in Wales’ if your business is based in Wales.


It can be hard to find the time to complete proper records when you are running your business. Also, it can sometimes be difficult to separate business and personal outgoings. For example, business and personal outgoings may become confused if:

  • you take food from the pub to feed your family but do not take a proper wage; or
  • your household bills are being paid out of the business bank account.

Keeping proper records can save you money in the long run. If you don’t have time to do your own bookkeeping, consider employing an accountant. Paying an accountant may seem expensive when money is tight. However, a good accountant can help you to save money by checking that you are getting the right tax allowances. They will also help you to recognise whether your business is viable.

Finding an accountant

The Institute of Chartered Accountants in England and Wales provides advice on finding an accountant. See Useful contacts at the end of this fact sheet.

Tax credits

If you cannot pay yourself a proper wage from your business, you may be eligible for Working Tax Credit or Child Tax Credit or both. These are regular payments to top up your earnings. Claiming the right benefits may mean that you can pay more towards your debts and get out of financial difficulty more quickly. For more information about tax credits, see Alternatively, contact HMRC on 0345 300 3900.

Other help

If you are in financial difficulty, the Licensed Trade Charity may be able to help. They cannot pay business debts for you, but might be able to help with other things, such as relocation expenses, white goods or even a bankruptcy deposit.

The British Institute of Innkeeping (BII) is the professional body for the licensed retail sector. Membership of the BII gives you access to a range of benefits, including:

  • legal advice;
  • business support;
  • mentoring;
  • marketing advice; and
  • health and safety advice.

Pub is the Hub is a not-for-profit organisation that is committed to improving community services and activities. The Pub is the Hub’s Community Services Fund can help projects which support the needs of local communities by using pubs to offer a new service or replace a service that has already been lost, such as a local shop, library, post office or community centre. Advice and grants of up to £3,000 may be available.

For more information, go to the Pub is the hub website and look at the ‘funding’ section.

Breathing space

If you need time to get debt advice and find a debt solution, you may want to consider applying for breathing space.

Breathing space will stop most types of enforcement and also stop most creditors applying interest and charges for 60 days.

To find out more, see our Breathing space fact sheet.

Leaving your pub

The information in this fact sheet may help you to continue in your business. However, if your business cannot get out of its difficulties and you need to leave it, it is important to take the right steps. Contact us for advice.

  • You may be able to sell your pub, or assign the lease to someone else. Assigning a lease means that you allow someone else to use the pub and they would pay rent to the landlord. Contact us for advice.

  • There are many selling agents on the market that specialise in selling licensed premises. If you are able to sell your pub, look for an agent that will not charge you an up-front fee. Be honest with them about your financial difficulties and tell them that you need a quick sale.

  • If you are not able to sell your pub, ask your landlord to consider allowing you to surrender the lease. They may not agree to this, but they would usually prefer to part with you on good terms rather than bad. They may want to appoint a surveyor to see if you are liable for any repairs or redecorating (known as ‘dilapidations’). Sometimes the security deposit that the landlord holds can be used to pay for rent arrears, beer and dilapidations. If you own the fixtures and fittings, the landlord might offer to buy these from you. If you still owe the landlord money, try to come to an arrangement with them about how you will pay this back.

  • Make sure you have given final meter readings to your utility suppliers. This will mean you are not liable for the new owner or tenant’s bills. It will also mean that the new owner or tenant is not penalised if you haven’t been able to clear your bills by the time you leave.

  • Inform HMRC that you have stopped trading, and ask to be de-registered for value added tax and Pay-As-You-Earn tax, if appropriate.

  • If you trade as a limited company, there are extra steps that you need to take. Contact us for advice.


If the landlord doesn’t allow you to surrender the lease, you will be liable for the rent and business rates on the premises until a new tenant or leaseholder can be found.

If you still have debts after leaving your pub, complete a budget of income and outgoings and consider the options available to you. Contact us for advice.

Useful contacts

British Institute of Innkeeping Phone: 01276 684449

Citizens Advice consumer helpline Phone: 0808 223 1133

HMRC Self Assessment Payment Helpline Phone 0300 200 3822

HMRC Payment Support Service Phone: 0300 200 3835

Institute of Chartered Accountants Phone: 01908 248 250 Email:

Licensed Trade Charity Phone: 0808 801 0550 Email:

Pubs Code Adjudicator Phone: 0800 528 8080

TaxAid Phone: 0345 120 3779

Other fact sheets that may help you

Breathing space fact sheet

Business rates fact sheet

Commercial property leases fact sheet

Income tax debt fact sheet

Limited companies fact sheet