Key facts
- The UK government will conduct an independent review to make business rate valuations fairer for pubs and hotels.
- The review's findings are expected by March 2027.
- Current business rate valuations will not be affected by this review.
- Andy Burnham previously announced a 20% business rate cut for pubs, social clubs, and live music venues.
- Industry groups have highlighted business rates as a significant burden on hospitality businesses.
The UK government has pledged to make business rate valuations fairer for pubs and hotels across England and Wales. This initiative stems from growing pressure to support the struggling hospitality sector, which has been impacted by increased business rates following the end of pandemic-era relief and new revaluations.
An independent review, led by business rates specialist Jerry Schurder, will examine the valuation system for these venues. The review is tasked with reporting its findings to the Treasury by the end of March 2027, considering valuations prior to the next scheduled revaluation in 2029. However, the current year's rise in valuations will remain unaffected.
Financial Secretary to the Treasury, James Murray, emphasized the vital role of pubs and hotels in communities and economic growth, stating that a "rethink of valuations" is necessary for a fairer future system. Industry leaders, including Allen Simpson of UKHospitality and Emma McClarkin of the British Beer & Pub Association, welcomed the review, noting that business rates continue to be a significant burden and the system needs to better reflect the sector's trading realities. They highlighted that disproportionately high business rates have hampered pubs' ability to remain open.
While welcomed, these measures come amid broader calls for a complete reform of the business rates system. Estimates suggest that approximately two pubs are closing daily in Britain this year due to a combination of higher taxes, wages, energy, and food costs. Additionally, Andy Burnham had previously announced a 20% business rate cut for pubs, social clubs, and live music venues in England, effective from April next year. There are also calls to extend similar relief to bookshops, with 234 independent booksellers signing an open letter to the prime minister. The government has indicated that reforms to business rates, including small business rates relief, are planned for John Healey's upcoming budget on October 28.