Review launched into how pub and hotel business rates calculated

A review is underway to examine the business rates system for pubs and hotels in England and Wales. The Treasury has appointed Jerry Schurder, a former business rates policy lead at advisory firm Newmark UK, to lead this investigation, with a report due in March 2027. The government is seeking input from landlords, hoteliers, and business owners throughout the process.

Last month, Andy Burnham announced a 20% reduction in business rates for pubs, social clubs, and live music venues, set to take effect in April. The British Beer and Pub Association (BBPA) reported that 161 pubs closed in the first three months of the year, resulting in approximately 2,400 job losses. Rising business rates are seen as a contributing factor to this decline, although other expenses, such as National Insurance and the minimum wage, have also been cited as problematic.

The BBPA claims that pubs are subject to different valuation measures than retail venues, with rates based on Fair Maintainable Trade - meaning that when a pub's turnover increases, so does its rates bill. Schurder's review aims to build a more equitable system for the future. Craig Beaumont of the Federation of Small Businesses welcomed Schurder's appointment, but called for further reforms to exempt smaller firms through an increased rates relief threshold.

Tom Ironside from the British Retail Consortium expressed support for the review but emphasized the need to address the concerns of retailers as well. Shadow Chancellor Sir Mel Stride criticized the timing of the review, stating that it was too late to save the hospitality sector, which has already suffered from tax hikes and regulatory burdens imposed by the current Labour government.

Labour's Treasury spokesperson, Daisy Cooper, advocated for the reform of business rates, along with an emergency VAT reduction and a reversal of recent job tax changes that have disproportionately affected the hospitality industry.