Government Initiates Review of Business Rates for Pubs and Hotels
The government has announced an independent review aimed at reforming the business rates valuation system for pubs and hotels, a move that highlights its commitment to support these essential establishments that contribute significantly to local economies. This initiative follows a recent announcement of a 20% reduction in business rates for pubs, social clubs, and live music venues, set to commence in April 2027.
As part of this review, the government acknowledges the substantial increases in rateable values faced by the hospitality sector during the 2026 revaluation, primarily due to the cessation of pandemic-related valuation measures. Concerns have been raised regarding the inequity of the current system, which many believe does not accurately reflect the realities of the pub and hotel industries.
Jerry Schurder, a noted expert in business rates, has been appointed to lead the independent review. His findings are expected to be submitted to the Treasury by the end of March 2027, ensuring that any recommendations can be incorporated into the next scheduled revaluation.
Engagement with Stakeholders to Inform the Review
The review process has been designed to be inclusive, with a Call for Evidence launched to gather insights from landlords, brewers, hoteliers, and business owners. This initiative aims to ensure that the voices of those directly affected by the business rates system are adequately represented. The government’s willingness to listen to the concerns of the sector demonstrates a proactive approach to creating a more equitable valuation framework.
Financial Secretary to the Treasury, James Murray MP, expressed the importance of pubs and hotels in fostering community and driving economic growth. He stated, “Last month we announced tax cuts for pubs to give them the breathing room they need. Today we’re going further with a rethink of valuations to build a fairer system for the future.”
Ongoing Support for the Hospitality Sector
The government’s recent actions include a previous 15% reduction in business rates for pubs and live music venues, implemented in April this year, alongside a two-year freeze in real terms. These measures are expected to save the average pub approximately £1,650 for the 2026/27 financial year, with around 75% of establishments anticipated to see their business rates either decrease or remain stable during this period.
This review is part of a broader strategy to enhance support for high streets and local communities, with further plans to improve the overall business rates system, including the Small Business Rates Relief, to be discussed in the upcoming budget.
Reactions from Industry Leaders
Industry leaders have welcomed the government’s commitment to reviewing the valuation methodologies for pubs and hotels. Allen Simpson, Chief Executive of UKHospitality, noted that business rates have long been a significant burden on hospitality businesses, emphasising the need for a system that accurately reflects current trading conditions. He expressed optimism about working collaboratively with the government to address these challenges.
Emma McClarkin, Chief Executive of the British Beer and Pub Association, echoed this sentiment, highlighting the disproportionate rates paid by pubs in recent years. She expressed hope that the review would rectify longstanding inequities and lead to a more transparent and fair valuation process.
Nick Mackenzie, CEO of Greene King, underscored the necessity for fundamental reform, pointing out that the current system has remained largely unchanged for three decades. He encouraged publicans and hoteliers to participate in the review process to facilitate much-needed change.
Neal Jones, President of EMEA at Marriott International, also expressed support for the review, recognising the significant strain that the existing valuation methodology imposes on hotels. He looks forward to contributing to the process to ensure a sustainable and competitive hotel sector that can drive jobs and investment across the UK.
Next Steps in the Review Process
The review is set to consider business rate valuations ahead of the next revaluation scheduled for 2029, meaning the valuations established in 2026 will remain unaffected. Stakeholders are encouraged to submit their responses by 16 October 2026 to ensure their perspectives are included in the forthcoming recommendations.
This initiative marks a crucial step towards a more equitable business rates system that reflects the realities of the contemporary hospitality landscape, ensuring that pubs and hotels can thrive in their communities.