Review launched into how pub and hotel business rates calculated

A review will be launched to examine the process by which business rates are calculated for pubs and hotels in England and Wales, potentially leading to system reforms. Treasury official Jerry Schurder will head the review into rate valuations, with findings due in March 2027. The government is seeking input from landlords, hoteliers, and business owners throughout the process.

Andy Burnham recently announced a 20% reduction in business rates for pubs, social clubs, and live music venues, effective April. However, pub groups argue they face higher rates, while others call for broader rates system reform. Between January and March, 161 pubs closed across England, Scotland, and Wales, resulting in 2,400 job losses.

Other factors, such as increased National Insurance and minimum wage costs, have also raised concerns. Treasury financial secretary James Murray states the review will explore rethinking valuations to create a fairer system. BBPA CEO Emma McClarkin emphasizes the need for reform, as pubs pay disproportionately higher rates compared to retail venues, with rates based on Fair Maintainable Trade.

Schurder, a former business rates policy lead at Newmark UK, will contribute expert insight to the review, which feeds into the next rates revaluation in 2029. Craig Beaumont of the Federation of Small Businesses welcomes the review but urges broader measures to exempt smaller firms. The British Retail Consortium's Tom Ironside also supports the review but stresses the need to address retailers' concerns.

Shadow Chancellor Sir Mel Stride deems the review too late for the struggling hospitality industry, citing tax hikes and regulatory burdens. Liberal Democrat Treasury spokesperson Daisy Cooper calls for reform and an emergency VAT cut. Burnham claims the 20% discount in England is a first step, but confusion remains over eligibility for some businesses, with details expected in Chancellor John Healey's upcoming Budget.