Hotels and pubs promised fairer bills — but not until 2027

Last orders loom as pubs wait for rates rescue

Hotels and pubs promised fairer bills — but not until 2027

Pubs and hotels have finally been promised a fundamental review of the business rates system that has left many facing crippling bills. But with the independent review not due to report until March 2027, struggling businesses must somehow survive another 18 months before reform even begins.

BUSINESS RATES REVIEW FOR PUBS & HOTELS

It’s a bid to rescue town centres but it may not come soon enough

The Treasury has kicked off a major review into how business rates are calculated for pubs and hotels, in the government’s latest attempt to revive struggling high streets and ease pressure on hospitality operators.

The move was announced today (Monday 24th August) and the review will examine whether the current valuation system is fair, transparent and fit for purpose. Ministers are promising reforms that will help pubs and hotels “plan better for the future”.

The government is also launching a call for evidence from landlords, brewers, hoteliers and business owners signalling that the sector’s long‑running complaints about outdated valuations and soaring bills are finally being taken seriously. Please do make your feelings known.

Under Strain

The move follows Burnham’s July announcement of a 20% business rates cut for pubs, clubs and venues from April next year, that added up to a £100m package funded by cracking down on businesses such as vape shops that “do not make a positive contribution to local communities”.

No 10 says further reforms, including small business rates relief, will be set out in the autumn Budget. James Murray, financial secretary to the Treasury, said the government is “going further with a rethink of valuations” to build a fairer system, and that “Pubs and hotels are vital for communities and bringing growth to every postcode.”

The Review

The review is to be independent and will report by March 2027.

The remit includes:

• assessing whether current valuation methods for pubs and hotels still work

• examining how turnover‑based valuations affect operators

• reviewing how modernisation, refurbishment and investment impact rateable value

• analysing regional disparities, especially in coastal and rural areas

• and gathering evidence directly from industry stakeholders (owners and operators).

What you have to say will be “central” to shaping recommendations.

This Matters

Pubs and hotels are anchors on many high streets by which we mean businesses that bring people into the area. When they struggle, the impact ripples out with lower footfall, weaker evening economies, reduced tourism spend, fewer local jobs, more empty premises and increased anti‑social behaviour around empty units.

A fairer business rates system could stabilise these anchors and by extension, stabilise town centres.

Pubs have been hit by rising energy costs and wage bills, supply chain inflation and fewer customers especially in the middle of the week. High business rates increases after revaluations have been the final straw for many.

Many operators say rates are now one of their biggest fixed costs, often rising even when turnover falls. A valuation overhaul could reduce punitive bills for community pubs, stop investment from triggering higher rates and support rural and coastal pubs facing disproportionate costs. The aim is to encourage new openings and refurbishments.

Hotels face different pressures with turnover‑based valuations that spike during peak seasons, high fixed costs (staffing, maintenance, utilities) and competition from short‑term lets.

A fairer system could help hotels invest in upgrades and increase capacity, stabilise prices and compete more effectively with alternative accommodation providers like Airb&b.

Too little, too late?

This review is more than a technical exercise. It’s a political signal that the government sees hospitality as central to high street recovery. If done well, it could cut costs for thousands of pubs and hotels, boost investment and jobs, revive local economies and strengthen community infrastructure.

However, March 2027 is a long way off and that’s just the expected date for the report. Once the recommendations are made it will take time to implement any changes. Hotels and pubs are on their knees now. This review must deliver, but there’s a danger it’s already too little, too late.