Key Highlights

  • The Treasury confirmed on 24 August 2026 an independent review, led by Jerry Schurder, into pub and hotel Business rates valuation, reporting by March 2027 ahead of the 2029 revaluation.
  • The April 2026 Revaluation introduced lower RHL multipliers (38.2p small business, 43p standard) but reset rateable values to April 2024 rental levels.
  • A separate 20% discount for pubs, clubs and live music venues takes effect from April 2027, costing around £100 million a year, saving the median pub roughly £1,100 annually.
  • UKHospitality's Allen Simpson called the review "positive" but warned it "will not solve the immediate financial challenges"; BII's Steven Alton said only one in four independent pub members are currently profitable.
  • Licensed premises in Great Britain stabilised at 98,564 by end-June 2026, though 1,839 venues closed in Q2 alone.

The Treasury confirmed on 24 August 2026 it is launching an independent review into how business rates are calculated for pubs and hotels in England, responding to years of sector complaints that valuation methods Fail to reflect the sharp rise in operating costs since the pandemic. The announcement follows an April 2026 revaluation and already-announced rate cuts for pubs, clubs and live music venues, but trade bodies stress a review reporting in 2027 does little to ease strain felt today.

For an industry UKHospitality's chief executive Allen Simpson says still finds business rates "a significant burden," and where only a quarter of one trade body's independent pub members are currently profitable despite healthy sales, the review is a meaningful acknowledgement — even if benefits will take years to materialise.

What Happened?

James Murray, financial secretary to the Treasury, said: "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 — so that we can build a fairer system for the future." The review will be led by Jerry Schurder, former head of business rates at Gerald Eve (now Newmark UK), who said he looks "forward to hearing from businesses, representative bodies and valuation professionals." The government will gather evidence from landlords, brewers and hoteliers, with a report due end-March 2027 feeding into the next revaluation, scheduled for 2029.

The review follows the April 2026 revaluation, which introduced two lower multipliers for retail, hospitality and leisure (RHL) properties: a small business RHL multiplier of 38.2p and a standard RHL multiplier of 43p, both below the ordinary multiplier, alongside a higher-value multiplier of 50.8p for properties above £500,000 rateable value. The revaluation also updated rateable values using April 2024 rental data rather than April 2021; as UKHospitality has warned, "any benefits of a lower multiplier could be negated by large increases in rateable value." Transitional relief caps bill increases at 5, 15 and 30% for small, medium and large properties respectively.

UKHospitality's Allen Simpson welcomed the review while cautioning it addresses medium-term structure rather than near-term pressure, calling it "positive" but "medium term reform that will not solve the immediate financial challenges caused by rising business rates bills." The British Institute of Innkeeping's Steven Alton pressed for broader reform, saying "only one in four of our members" are currently profitable "despite strong sales," and calling for a VAT rate of 10% on pub sales.

The Numbers

The review sits alongside an already-legislated measure: from April 2027, pubs, clubs and live music venues will get a 20% business rates discount, costing around £100 million annually and saving the median eligible pub roughly £1,100 a year. Prime Minister Andy Burnham said the discount would be funded partly by removing reliefs from businesses "such as vape shops." Chief Secretary Emma Reynolds signalled "further reforms" could extend to hotels, restaurants and cafés at the Autumn Budget.

Sector data illustrates the pressure. NIQ's Hospitality Market Monitor, powered by CGA, recorded 98,564 licensed premises in Great Britain at end-June 2026, with 1,839 closures and 1,794 openings between March and June — churn NIQ's Karl Chessell described as showing "the fragility of businesses" alongside "the confidence of entrepreneurs and investors." The total was 0.2% lower than a year earlier, indicating stabilisation after a sharper Q1 decline.

These pressures compound cost increases since April 2025, when employer National Insurance rose from 13.8% to 15% and the threshold fell from £9,100 to £5,000, disproportionately affecting labour-intensive sectors. The National Living Wage also rose 4.1% to £12.71 from April 2026.

Why It Matters

Business rates have long been a structural sore point because the tax is levied on rateable value largely irrespective of profitability — a model critics say penalises physical, labour-intensive premises relative to online retailers. A fairer valuation methodology, if adopted at the 2029 revaluation, could meaningfully reduce that disadvantage, but the multi-year timeline offers no immediate relief today.

The review also signals political intent under the Burnham government, which moved quickly — within weeks of taking office in July 2026 — to address hospitality complaints, first through the pubs discount, now the valuation review.

Investor & Market Perspective

For listed operators, the review's near-term financial impact is limited — a consultative process reporting in 2027 informing the 2029 revaluation, not an immediate bill change. Investors are more likely to focus on the already-legislated 20% discount from April 2027, and the possibility flagged by Emma Reynolds of further support for hotels and restaurants ahead of the Budget. More material to near-term Earnings has been the direct cost impact of NIC and wage increases already absorbed, which both major listed pub groups have quantified in recent results.

What Happens Next?

Schurder's review is due by end-March 2027, shaping the 2029 revaluation — meaning structural change will not take effect for years. The Autumn Budget is the next major test, with Reynolds having flagged possible further measures beyond pubs. Trade bodies including UKHospitality and BII are likely to keep pressing for more immediate relief, particularly on VAT.

Outlook

The Treasury's decision to review business rates valuation for pubs and hotels is a genuine, dated concession to years of sector lobbying. But as UKHospitality's reaction makes clear, a review reporting in 2027, feeding a 2029 revaluation, does not resolve pressures felt now — leaving near-term fortunes hinged on the Autumn Budget and the pace of recovery more than on the review alone.