UK Treasury orders review of pub and hotel rates

BBPA reports 161 pub closures in first quarter of 2026

The UK Treasury has commissioned a review of how business rates are calculated for pubs and hotels in England and Wales, Financial Secretary to the Treasury James Murray announced. Jerry Schurder, a former business rates policy lead at advisory firm Newmark UK, will lead the review and report back by March 2027, with findings feeding into the next rates revaluation in 2029.

Murray said the review would consider “a rethink of valuations - so that we can build a fairer system for the future.” The Treasury said it would seek views from landlords, hoteliers and business owners.

The announcement follows two earlier rounds of rate cuts for pubs and live music venues in 2026 and comes amid warnings from the hospitality sector over rising closures and operating costs. According to the British Beer and Pub Association (BBPA), 161 pubs closed in the first three months of the year across England, Scotland and Wales, equating to around 2,400 jobs lost.

The BBPA has argued pubs face disproportionately higher rates bills because they are valued differently than retail venues. Rather than being based only on floor area, pub rates are calculated using a measure called Fair Maintainable Trade, which links rates bills to turnover. The BBPA says that structure means when a pub’s turnover increases, so does its rates bill.

Rising business rates have been cited as one factor pressuring the sector, alongside increases in employers’ National Insurance contributions and the minimum wage that have raised staff costs.

Last month, Andy Burnham announced a 20% cut in business rates for pubs, social clubs and live music venues in England, effective from April. That cut followed an earlier 15% reduction for pubs and music venues in 2026, after the government under former chancellor Rachel Reeves had announced the scaling back of pandemic-era rate discounts and said there would be no discount from April 2026. The 20% July discount applies on top of existing support, though the government said it would not apply to the “very largest” live music venues, and some businesses raised concerns about confusion over eligibility. Details about which businesses qualify are expected to be announced at Chancellor John Healey’s first Budget in the autumn.

Industry responses to the review were broadly positive, though trade bodies pressed for wider change. Emma McClarkin, chief executive of the BBPA, said: “For years pubs have paid a disproportionately higher business rates bill which has ground down their ability to keep the doors open, so this review is sorely needed and hugely welcome.”

Craig Beaumont of the Federation of Small Businesses welcomed Schurder’s appointment, saying he would bring “crucial heavyweight business rates expertise into the Treasury,” but said the government needed to address the wider business rates system by raising the rates relief threshold for small businesses. Tom Ironside of the British Retail Consortium also welcomed the review but said it was “vitally important that the needs of retailers are not overlooked.”

Shadow Chancellor Sir Mel Stride criticised the timing of the announcement. “Tax hikes on business premises and jobs, alongside job-destroying regulation in the Employment Rights Act, have left many hospitality businesses on the brink,” he said.

Liberal Democrat Treasury spokesperson Daisy Cooper said reform of business rates was “long overdue,” and called for an emergency VAT cut and a reversal of jobs-tax changes “which have hammered hospitality in particular.”