Treasury U-Turn On Business Rates To Benefit Pubs Welcomed

A Treasury U-turn will bring temporary relief to pubs and live music venues across England and Wales, easing the impact of steeply rising business rates that had threatened large swathes of the sector.  Despite welcoming the news for pubs and live music venues there remains disappointment that the relief has not been applied more widely to support other hospitality businesses and firms on the High Street that are struggling with the same issues associated with the increase in business rates and the ongoing pressures associated with the rising costs of doing business today.

The government has come under sustained pressure since changes announced in the November budget, combined with the withdrawal of pandemic-era support, left many businesses facing sharp increases in their rates bills from April. Pubs were particularly exposed, with the rises landing alongside higher minimum wages and increased employer national insurance contributions.

Industry bodies warned that, without intervention, hundreds of pubs and grassroots music venues could be forced to close. In response, ministers have now confirmed that in 2026–27 all pubs and live music venues will receive a 15% business rates discount, on top of the support already announced at Budget 2025. Their bills will then be frozen in real terms for a further two years.

To qualify, a pub must be open to the general public, allow free entry except for occasional entertainment, permit drinking without the requirement to consume food, and sell drinks at a bar. Restaurants, cafés, nightclubs, hotels, sporting venues, theatres, concert halls, cinemas, museums and casinos are excluded. The list is not exhaustive, and local authorities will have discretion to determine eligibility in borderline cases, drawing on their local knowledge and the ordinary meaning of what constitutes a pub.

Live music venues are defined as properties used wholly or mainly for the performance of live music to entertain an audience. Other activities are permitted only where they are incidental, such as selling food and drink, or infrequent and do not undermine the venue’s primary purpose. Nightclubs and theatres, as defined under planning regulations, are excluded from the relief.

Eligible pubs and live music venues will receive the 15% discount in 2026–27, applied alongside any transitional or small business relief they already receive. In 2027–28 and 2028–29, their business rates bills will be frozen in real terms, meaning increases will be limited to inflation.

The move offers some breathing space for sectors that have struggled to recover from the pandemic and rising costs, though many operators continue to warn that longer-term reform of the business rates system remains essential if pubs and live music venues are to survive.

Louise Hellem, CBI Chief Economist, said:  “Targeted support for pubs will be welcomed by those businesses, but it does not address the fundamental problem that our whole business rates system is broken. What we need is genuine reform, not another layer of complexity."

“The business rates burden is rising sharply across the economy, hitting major infrastructure as well as sectors like retail and hospitality."

"The UK’s business tax burden is already at a 25-year high, with the highest property tax in the OECD – before big increases kick in from April 2026."

“Business rates affect every bricks-and-mortar company in the UK, from pubs and shops to airports and utilities. Increasing taxes on business has consequences. With business investment and profitability already under considerable strain, growth is stalled and job creation is plateauing. A large transport operator told us that they faced a four-fold increase in their bills, while another said they had already halted investment in order to cover their business rates tripling."

“With pressure from rising energy and labour costs, firms are facing a perfect storm. Piecemeal reliefs and sector-specific carve-outs risk adding further complexity without giving businesses the certainty needed to invest and grow."

“The government is right to prioritise tackling cliff-edges, which have long acted as a brake on investment and growth across the economy. We welcome both the commitment to explore a slice-based system and options for improving investment incentives – such as enhancing improvement relief. We’re also keen to support the government’s new High Street Strategy to bolster local jobs and opportunities across the country."

“Businesses are crying out for fundamental reform not further tinkering. The case to act – implementing business rates reform that supports investment, competitiveness and economic growth across all sectors – has never been stronger."

William Lees‑Jones, Managing Director of JW Lees Brewery added that "I suppose it shows that government is listening but I really feel for the hotel sector since they got nothing and have been worse hit by the changes."

Steve Perez, founder and CEO of Global Brands, Casa Hotel, Peak Edge Hotel and Red Lion Restaurant adds, “While it’s certainly welcome news that the Government has recognised the damage its original approach to business rates would have caused, this is not a U-turn but a slight left turn, and simply doesn’t go far enough."

"Limiting support to pubs and music venues only – just a subsection of the hospitality sector – ignores the fact that restaurants, hotels and other venues are also facing the same intense cost pressures, which will only worsen when the increased alcohol duty and national minimum wage both take effect in the coming weeks."

"The hospitality industry doesn’t operate in silos, and so neither should policy."

"This means it will be more expensive to holiday in the UK. Unlike the most rest of Europe who an average of 13% (eg Spain, France Italy 10%)  the UK pays 20% VAT for hospitality so this make us uncompetitive."

“These constant U-turns are also becoming increasingly frustrating. Businesses need stability and clarity to plan and invest, not last-minute reversals on poorly thought-through policies."

"The Government must start properly consulting with businesses before announcing changes, to understand their real-world impact and avoid making decisions that have to be hastily revised.”

"Unfortunately we are going to see more restaurants, cafes and wonderful  hotels close more job loses due to this governments lack of understanding of business."

Kevin Georgel, Chief Executive, St Austell Brewery: “We welcome today’s intervention by the government which will mitigate the impact of business rates increases that were scheduled for April. We are pleased that the government has engaged with our trade bodies and heard the voice of the British public who so clearly recognise and value the enormous economic, social and cultural contribution of our pubs."

“It has been heartening to see the support of the public play out so clearly across the media in recent weeks and this public support has rightly influenced the government to reconsider their proposed changes to business rates that would have seen an acceleration in pub closures."

“We hope that this intervention is a recognition that we need a full review of the fiscal and regulatory landscape that has placed an unfair and unsustainable burden on the Great British pub. We now need to continue working with the government to permanently overhaul the outdated business rates system."

"Over time, we must create the conditions in which pubs can not only survive, but once again thrive at the heart of their communities - providing valuable employment, fostering social connection and cohesion, and acting as engines of economic growth across the length and breadth of the country."

Kate Nicholls, Chair of UKHospitality, said: “We welcome the recognition by the Prime Minister and the Chancellor of the scale of the challenges facing the hospitality sector. They have listened to us about the acute cost challenges facing businesses, all of which is impacting business viability, jobs and consumer prices."

“The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution. The Government’s immediate review of hospitality valuations going forward is clear recognition of this."

“The devil will be in the detail, but we need to see pace and urgency to deliver the reform desperately needed to reduce hospitality’s tax burden, drive demand, and protect jobs and growth. We will work with the Government over the next six months to hold their feet to the fire to deliver this."

“This emergency announcement to provide additional funding is helpful to address an acute challenge facing pubs."

“The reality remains that we still have restaurants and hotels facing severe challenges from successive Budgets. They need to see substantive solutions that genuinely reduce their costs."

“Without that clear action, they will face increasingly tough decisions on business viability, jobs and prices for consumers. Those are costs borne by us all, and I hope the Government delivers on its promise to support the whole hospitality sector.”