The government has ordered an independent review into how business rates are calculated for pubs and hotels in England and Wales. If you run one, the honest summary is this: your bill is not changing because of it – but you now have a window to influence the system that sets it.
What has been announced?
The Treasury has appointed Jerry Schurder, an independent business rates specialist and former business rates policy lead at advisory firm Newmark UK, to examine how hospitality premises are valued. He reports back by the end of March 2027, and his findings feed into the next revaluation in 2029.
Crucially, the review does not touch the valuations that landed this year. Those stay as they are.
James Murray, financial secretary to the Treasury, framed it as “a rethink of valuations” intended to “build a fairer system for the future”. The Treasury is explicitly asking landlords, hoteliers and other operators in England and Wales to submit views.
The real problem: you’re taxed on trading, not just space
This is the part worth understanding, because it explains why hospitality bills behave so differently from everyone else’s.
Most commercial premises are valued on floor area and local market rent. Pubs are not. They’re assessed using Fair Maintainable Trade – a measure based on the turnover the property could reasonably be expected to generate. This means when your turnover increases, so does your rates bill.
Jonathan Lawson, chief executive of Butcombe Group, which runs around 120 pubs across the south and south west of England, told BBC Radio 4’s Today programme the method effectively punishes operators for success. He contrasted it with large online retailers running high-turnover warehouses, whose bills are pegged to notional market rent and take “very little on board in terms of revenue driven through that site”.
Hence the distortion many owners will recognise: a large, low-rent site paying modestly while a small, busy pub pays heavily.
Why the timing stings
Covid-era rate discounts were wound down under the previous chancellor, Rachel Reeves, with no discount at all from April this year. This coincided with sharp upward revisions to pub rateable values, meaning a double hit on the same bill.
Two rounds of relief have followed. Rates for pubs and music venues were cut 15% earlier in 2026, and in July Prime Minister Andy Burnham announced a further 20% cut for pubs, social clubs and live music venues in England from April, on top of the existing support.
The closure numbers explain the urgency. The British Beer and Pub Association counted 161 closures across England, Scotland and Wales in the first quarter alone, accounting for roughly 2,400 jobs. Industry estimates put the running rate near two pubs a day. Rates are only part of it: higher National Insurance and minimum wage costs have pushed up staffing bills simultaneously.
What to do between now and October
Put the Budget in your diary. Chancellor John Healey delivers his first Budget on 28th October. This will outline which businesses qualify for the 20% cut. There’s been real confusion over what counts as a pub, and the “very largest” live music venues are already excluded. If your classification is borderline, this is the date that decides it.
Watch the small business rates relief threshold. Wider reform has been signalled for the same Budget. The Federation of Small Businesses is pushing for a higher threshold to take more small firms out of the system entirely.
Submit evidence if the methodology hurts you. A call for views is an opportunity to put your actual numbers in front of the Treasury. Trade bodies will make the general case while specific, documented examples can still make an impact.
If you’re not a pub or hotel
The review is narrow, and others have noticed this and called for it to be applied to some other businesses, including some retailers. Already 234 independent booksellers have signed an open letter this month asking for the same treatment as pubs and music venues.
Politically, the criticism is that the review is late and no widespread enough. Shadow Chancellor Sir Mel Stride called it “far too late” for the sector; the Liberal Democrats’ Daisy Cooper described reform as “long overdue” while pressing for an emergency VAT cut and a reversal of the jobs tax changes.
