Government announces independent review of business rates for pubs and hotels

The government has promised that business rate valuations will be “made fairer” for pubs and hotels in England and Wales, as Andy Burnham faces growing calls to help the UK’s struggling hospitality sector.

An independent review for England and Wales will look at improving the system for hospitality venues, which were hit by higher business rate bills this year after the end of pandemic-era relief and when new revaluations took effect.

It comes after Burnham announced last month that he would cut business rates for pubs, social clubs and live music venues in England by 20% from April next year.

The government has faced calls to reduce the tax burden on hospitality businesses, which have also struggled to cope with rising energy and food bills in recent years.

The review, which will be led by Jerry Schurder, an independent business rates specialist, will report back to the Treasury by the end of March 2027. It will consider valuations before the next revaluation date in 2029. The rise in valuations this year will not be affected.

James Murray, the financial secretary to the Treasury, said: “Pubs and hotels are vital for communities and bringing growth to every postcode,” adding that a “rethink of valuations” would help “build a fairer system for the future”.

Allen Simpson, the chief executive of the trade body UKHospitality, said it was positive the government was looking seriously at the valuation methodology for pubs and hotels.

“Business rates remain a significant burden for hospitality businesses, and the system needs to better reflect the trading realities for the sector,” he said.

Emma McClarkin, the chief executive of the British Beer & Pub Association, said the review was “sorely needed and hugely welcome” as pubs had for years “paid a disproportionately higher business rates bill which has ground down their ability to keep the doors open”.

While cuts have been welcomed by business owners, the industry has repeatedly called for the reform of the whole business rates system. Estimates suggest that two pubs are closing a day across Britain this year, hit by higher taxes, wages, energy and food costs.

Burnham is also facing calls to extend the business rates relief aimed at pubs, clubs and live music venues to bookshops. This month 234 independent booksellers signed an open letter calling on the prime minister to give bookshops the same consideration as other businesses that play a positive role in their communities.

The government has suggested that it will reform business rates, including small business rates relief, at John Healey’s first budget on 28 October.