Government Launches Business Rates Review for Pubs and Hotels
The UK government has started a review into how business rates are calculated for pubs and hotels in England and Wales, aiming to address 'unfairness' in the sector.
The UK government has launched a review into how business rates are calculated for pubs and hotels in England and Wales. The review, led by business rates specialist Jerry Schurder, aims to address the "unfairness" in the sector.
Pubs and hotels are currently taxed on their turnover, rather than their floor space, which can lead to higher rates bills for successful businesses. This is in contrast to retailers, who are taxed on their floor space. The review will investigate whether the current valuation system accurately reflects trading conditions for hospitality businesses.
The review is expected to feed into the next nationwide revaluation in 2029. However, business owners who cannot afford to wait for the overhaul may be able to get relief through existing government schemes.
Existing Business Rates Relief Schemes
There are several business rates relief schemes available to help hospitality venues ease their tax burdens. These include Retail, Hospitality and Leisure relief, small business rate relief, rural rate relief, and transitional relief.
The Retail, Hospitality and Leisure relief scheme ended on 31 March 2026, but eligible properties with a rateable value under £500,000 now benefit from permanently lower business rates multipliers. Businesses with a rateable value less than £15,000 may qualify for small business rate relief, which would result in their rate of relief decreasing from 100% to 0% as the rateable value rises towards the threshold.
Rural pubs may qualify for rural rate relief if they are the only such business in their settlement, while transitional relief can cushion the blow for those hit by steep rises at the 2026 revaluation. Businesses in genuine financial difficulty can also apply for discretionary hardship relief via their local council.
Business Rates Review Timeline
The government's independent review will investigate whether the current valuation system accurately reflects trading conditions for hospitality businesses. The review will feed into the next nationwide revaluation in 2029.
The review is expected to deliver findings in March 2027, but real change will not land until the 2029 revaluation. This means that many operators will face a long wait before meaningful relief.
| Scheme | Description |
|---|---|
| Retail, Hospitality and Leisure relief | Permanently lower business rates multipliers for eligible properties with a rateable value under £500,000 |
| Small business rate relief | Rate of relief decreases from 100% to 0% as the rateable value rises towards the threshold |
| Rural rate relief | Available to rural pubs that are the only such business in their settlement |
| Transitional relief | Cushions the blow for those hit by steep rises at the 2026 revaluation |
Industry Reaction
The news of the government's review has been broadly welcomed across the industry, but some fear it does not act fast enough for hospitality business owners who need help today. CAMRA chairman Ash Corbett-Collins described the review as "another promising step" from the Government, but warned that it would not ease pressure in the short term.
UK hospitality chief executive Allen Simpson welcomed the review, but pointed out that it amounts to "medium-term reform that will not solve the immediate financial challenges caused by rising business rates bills". He highlighted the steep rises already hitting the sector, with the average hotel's rates up 110% over the past three years, and restaurants facing increases of 54%.
The message from across the industry is a familiar one: reform is welcome, but it is happening too slowly. With Britain and Wales's pub and hotel sector buckling under the weight of rising costs, many business owners will not be able to wait until 2029 for meaningful change.
Business owners who are struggling to pay their business rates bills can contact their local council to see if they are eligible for discretionary hardship relief. They can also use the government's free template to send a letter to their MP about business rates.
