The Treasury has enlisted an expert to review how business rates are calculated for pubs and hotels and make recommendations for reform of the system. The move follows concerns that the current system does not reflect the realities of the pub and hotel market, the Treasury admitted.
Valuations review
Pub and hotel valuations will be made fairer under plans to make the system more transparent. Both sectors saw significant increases in rateable value at this year's revaluation, in large part due to the ending of pandemic-era valuations.
Jerry Schurder, former business rates policy lead at advisory Newmark UK, will lead the independent review into valuations and report back to the Treasury by the end of March 2027. A Call for Evidence, which launches on Monday, will ensure landlords, brewers, hoteliers and business owners are properly represented in the process, ministers said.
Industry reaction
Financial Secretary to the Treasury James Murray said: “Pubs and hotels are vital for communities and bringing growth to every postcode. Last month we announced tax cuts for pubs to give them the breathing room they need. Today we’re going further with a rethink of valuations – so that we can build a fairer system for the future.”
Emma McClarkin, chief executive of the British Beer and Pub Association, 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.”
Neal Jones, EMEA president at Marriott International, said: “The current valuation methodology creates a significant burden for hotels, and it is right that the system is being examined to ensure it is fair, transparent, and reflective of today’s market realities.”
Government measures
The government last month cut business rates for pubs, social clubs and live music venues by 20% from April next year. The move was largely welcomed but there were calls to apply the relief to a wider range of businesses and to go further with broader changes to the system. No 10 has said it will look to set out further reform, including small business rates relief, at the Budget.
Allen Simpson, chief executive at UK Hospitality, said: “Business rates remain a significant burden for hospitality businesses and the system needs to better reflect the trading realities for the sector. Comprehensive review and reform can address these challenges, while also supporting investment and growth.”
Braden Saunders, UK Spirits Alliance spokesperson and owner of Battersea-based Doghouse Distillery and Bar, said: “The Prime Minister’s business rates cut for hospitality costs £100 million. The excise duty hike at the last budget lost the Treasury nearly the same amount in spirits revenue last year. Cut excise duty on spirits, fund the rates cut – it pays for itself. We welcome this review and look forward to engaging.”
