The reduced business rates discount will see the average business rates bill for pubs rise from £3,938 to £9,451, according to global tax and software firm Ryan.
The reduction in support for business rates was announced at the October Budget last year, announced by Chancellor Rachel Reeves who also revealed the system will see an overhaul in 2026/27.
The intention would be to introduce permanently lower business rates multipliers for high street retail, hospitality and leisure business premises with a rateable value of less than £500,000.
Huge challenge for pubs
This week, Star Pubs central operations director Caren Geering called on the Government to follow through on its pledge to revamp business rates.
She said: “We were disappointed on the decision to cut business rates support in the Budget in October and that will present a huge challenge for our pubs.”
Ryan also outlined how the UK has the highest property taxes across the entire developed world - the equivalent of 3.7% of property taxes-to-gross domestic product (GDP) in 2024, however, this was down 0.3% on the previous year.
Disincentive to invest
Ryan practice leader of EAP property tax Alex Probyn said: “The UK is characterised across the developed world as having high levels of revenue from taxes on property.
“Our clients already tell us the level of business rates tax act as a disincentive to invest and the current effective tax rate of 54.6%, which will rise to 55.5% on 1 April 2025, for commercial property does nothing to dispel that.”
Revenue from the business rates tax across the whole of the UK is expected to raise £32.1bn - up £2.8bn for the financial year ending 31 March 2025, which was up 9.6% on the previous year.
The 6.7% rise in the standard rate of tax a key driver for this rise, according to Ryan.
