Last Minute Reprieve: Pubs Get 15% Relief on Business Rates Ahead of April Updates
By The current Government is rapidly becoming one defined by U-turns, but this week’s announcement of an emergency support package for pubs is a climb-down welcomed by many. On 27th January, the Chancellor confirmed that pubs in England will receive a 15% cut to new business rates from April 2026, alongside a two-year freeze on future increases. The Treasury has also committed to reviewing how pubs are valued for business rates.
The announcement follows a noisy backlash to the Autumn Budget and growing concern that rising rates would push already stretched hospitality businesses to the brink. While the measures will offer some relief to pubs in the short term, they do little to address wider industry concerns about the steadily rising cost of doing business.
What’s Been Announced?
Under the new package, pubs and grassroots live music venues in England will see a 15% reduction applied to their new business rates bills from April 2026. Bills will also be capped in real terms for a further two years. According to the Treasury, this equates to an average saving of around £1,650 per pub in 2026/27, with around three-quarters of pubs expected to see their bills fall or remain flat next year.
Alongside this, the Government has confirmed it will review how pubs are valued for business rate purposes, with any changes feeding into the next revaluation in 2029. This is in addition to measures already announced at the Autumn Budget, including changes to multipliers for retail, hospitality, and leisure properties.
Why Single Out Pubs?
Hospitality in general has been hit hard by successive Budgets. Increases in employer National Insurance Contributions (NIC), the National Minimum Wage (NMW), and business rates have all taken their toll on an industry already grappling with reduced footfall and rising operating costs.
But pubs were set to be hit particularly hard by the Autumn Budget, which confirmed changes to business rate multipliers and removed long-standing retail, hospitality, and leisure discounts just as new rateable values take effect. While most hospitality businesses are valued based on the rental value of their premises, pubs are assessed using ‘fair maintainable turnover’. This estimates the revenue a ‘reasonably efficient operator’ could achieve, rather than relying on actual sales.
Data from the Valuation Office Agency (VOA) shows that rateable values for pub restaurants are set to increase by an average of around 30% from 2026, rising to around 70% for pubs with accommodation. This compares with an average increase of just under 20% across all properties in England.
The Bigger Picture
The relief applies specifically to pubs and live music venues, leaving much of the wider hospitality sector still exposed to rising rates, higher valuations, and the loss of pandemic-era discounts.
Even so, the industry response has been broadly positive, though many have been quick to point out that this is a short-term intervention aimed at a subsection of an industry still under pressure. UKHospitality Chair, Kate Nicholls, said the measures “address an acute challenge facing pubs”, but warned that “the reality remains that we still have restaurants and hotels facing severe challenges from successive Budgets.”
Those challenges are compounded by wider changes to employment law. The Employment Rights Act 2025 will introduce a number of new measures from April. While backbench pressure has meant the legislation is more limited than originally proposed, the changes that are coming into force this year will still increase the administrative burden for operators. The expansion of Statutory Sick Pay to a day-one entitlement, in particular, adds further cost and complexity to managing labour in a sector defined by variable hours and earnings, and high staff turnover.
Still scratching your head over 2026’s upcoming legislative changes?
Fourth’s HR and Payroll Legislation Update 2026 provides a practical overview of incoming employment law changes. Written specifically for hospitality operators, it’s designed to equip you with all the information you need to prepare for April 2026.
The emergency support package offers pubs some welcome short-term relief, but it stops short of addressing the wider pressures facing hospitality. Labour costs continue to rise, consumer spending remains subdued, and tax and regulatory changes add further pressure for operators.
Even so, the intervention is a positive step and reflects a growing acknowledgement of the challenges facing the sector. While limited in scope, this week’s announcement represents progress for industry bodies such as UKHospitality and highlights the value of continued, constructive engagement between government and hospitality operators.