Rising UK Business Rates Hit Pubs Even With Government Relief
Pub groups warn that new business rates will raise bills for many venues, despite government relief plans aimed at supporting retail, leisure and hospitality sectors.
A small pub group in the southeast of England warns its annual costs will jump by £62,000 after Budget changes. While ministers promise lower taxes for pubs and cafes, many operators say their business rates bills will still rise.
Significant impact on Thorley Taverns
Phil Thorley, who runs Thorley Taverns with 18 sites, says 17 of them will see higher rates bills. He estimates the total increase for the group at about £62,000 a year, adding to pressures the business already faces.
Understanding business rates and the changes
Business rates are a tax on commercial property, calculated using the rateable value, the estimated yearly rent value of the property. The government says it will apply a lower tax rate to around 750,000 high street retailers and hospitality firms, but the relief is not as generous as many hoped.
In addition, many outlets face higher rateable values and the end of a Covid era 40 percent discount from April, compounding the impact.
Transitional relief caps how much rates can rise each year. For properties outside London with a rateable value between £20,000 and £100,000, the caps are 15 percent in 2026-27, 25 percent in 2027-28, and 40 percent in 2028-29, plus inflation.
Estimated costs across the sector
Industry group UK Hospitality estimates an average pub would pay about £12,900 more over the next three years, while an average hotel could face about £205,200 more.
Industry voices and concerns
Thorley told INLIBER that the rateable values at most of his sites had moved higher. He said an extra £62,000 in costs would be tough for a business already under strain.
He warned the situation is worsened by ongoing wage increases, which could reduce hiring and training, and push more young people out of work.
Elaine Wrigley, owner of Atlas Bar in Manchester, said her rateable value rose from £69,000 in 2023 to £97,000. She added that even with favourable multipliers, she faces a 15 percent rate rise and fears margins will shrink as prices have already risen several times in the past year.
Sacha Lord, chair of the Night Time Industries Association, described the changes as a stealth tax on pubs, restaurants and bars on the High Street. He warned that, once the new system starts in April, closures could rise even more than during the pandemic.
Opposition figures criticized the government, saying there should be greater relief and certainty for businesses facing bills in April.
Government response
The government says its plan includes a 4.3 billion pound relief package to limit rate bills for pubs, restaurants and cafes and supports other measures to help outdoor dining, along with continued cuts to alcohol duty and capped corporation tax.
Expert perspective
Expert comment: A policy analyst notes that while relief helps, rising rate bills squeeze margins and may deter investment, especially for small venues. Clarity on how caps apply to individual sites will be crucial for planning.
In summary
Budget relief provides some help, but many hospitality firms face higher bills as rateable values rise and Covid discounts end. The cumulative cost could threaten jobs and investment, even as the government defends the package as stabilizing for high streets. Industry voices say more targeted relief and certainty are needed for small pubs and cafes.
Key insight: Even with relief, rising business rates pose a real risk of closures for pubs and other venues; certainty before April is essential. BBC News