Government promises fairer business rate valuations for pubs and hotels

The government has pledged to make business rate valuations fairer for pubs and hotels in England and Wales, launching an independent review ahead of the next revaluation in 2029. The move follows mounting pressure on ministers to support the hospitality sector, which has faced significantly higher bills this year after the withdrawal of pandemic-era relief and the introduction of new property valuations.

The review will examine how the current system operates for hospitality venues, with a focus on addressing the disproportionate impact of rate increases on pubs and hotels. These businesses were among those hardest hit when temporary relief schemes ended and revaluations took effect, leaving many operators facing steep rises in their fixed costs at a time when consumer spending remains under pressure.

Hospitality industry representatives have long argued that the business rates system is ill-suited to the sector, penalising property-intensive businesses whose trading conditions bear little relation to their rateable value. Pubs and hotels, in particular, have campaigned for a system that better reflects their profitability rather than the physical size and location of their premises. The review is expected to consider alternative approaches to valuation, including whether turnover-based calculations could offer a fairer measure.

The announcement comes as Andy Burnham, the Mayor of Greater Manchester, faces growing calls to intervene on behalf of the UK’s struggling hospitality sector. While business rates are a devolved matter in parts of the UK, the review applies specifically to England and Wales, where the majority of the country’s pubs and hotels are located. Industry groups have welcomed the review but cautioned that meaningful reform will take time, with the next revaluation not due until 2029.

The government has indicated that the review will be led by an independent expert, with terms of reference expected to be published in the coming months. The aim, according to officials, is to create a system that is more transparent and better aligned with the economic realities facing hospitality businesses. The sector has been a vocal critic of the current regime, arguing that it discourages investment and undermines the viability of community pubs and independent hotels.

For many operators, the immediate concern remains the current tax year, with some facing bills that have risen by double digits. The review offers a longer-term prospect of change, but the sector is likely to press for interim measures to ease the burden before the next revaluation cycle. The government has not yet indicated whether any transitional relief will be made available in the meantime.

The review is part of a broader effort to modernise the business rates system, which has been criticised across multiple sectors for being outdated and out of step with modern trading patterns. For pubs and hotels, the stakes are particularly high, given their role in local economies and employment. The outcome of the review will be closely watched by hospitality businesses across England and Wales, many of which are hoping for a system that recognises the unique pressures of their trade.