The hospitality sector is awaiting confirmation of new business rates multipliers for 2026 to 2027.
However, operators will not know the real impact until the Draft 2026 Local Rating Lists are published within days of the Budget. These lists will reveal new rateable values based on April 2024 rental evidence.
UKHospitality chair Kate Nicholls said the industry is preparing for increases.
She told The Morning Advertiser (The MA): “We have long called for the broken business rates system to be reformed and I am pleased the Government has legislated to do just that. All eyes are now on the Budget where we need to see the maximum possible discount applied to the multiplier for all hospitality properties under £500k rateable value.
“The result of the 2026 revaluation process will be critical and we do unfortunately expect to see increases on current rateable values particularly for pubs. That makes delivering maximum benefit even more important. We are calling for generous transitional relief and for caps on valuation increases to reflect that the revaluation compares to April 2021 when the sector was closed during the pandemic.”
The industry’s specific asks include the maximum possible discount for hospitality under £500k rateable value and a zero pence surcharge for venues above that threshold. The industry also wants sector specific transitional relief to manage sharp increases.
Permanent support for pubs
From April 2026 England will move to a five-tier multiplier system which permanently embeds a lower rate for retail hospitality and leisure properties below £500k rateable value. This replaces the temporary reliefs renewed annually since 2020.
However the Treasury also has new powers to apply a high value supplement of up to ten pence in the pound on properties above £500k rateable value. The final rate and any sector exemptions will be confirmed at the Budget.
The combination of rising rental values, inflation linked uprating and the end of temporary retail hospitality leisure relief means large pubs and hospitality venues could face higher bills from April 2026.
Pub sector concerns
BII chief executive Steve Alton said operators support reform but warned the changes must reduce rather than repackage costs.
He told The MA: “We have been fighting for reform of the unfair and outdated business rates system for years so the proposed changes are welcome in principle. Permanently lower bills without the need for the current forty percent relief would be hugely valuable.
“However with the 2026 revaluation likely to significantly increase rateable values for many any permanent discounts could be eroded. We need a reform that actually reduces the unfair cumulative tax burden rather than one that changes the calculation but delivers the same or higher bills. The Small Business Rates Relief threshold must also rise to protect smaller pubs.”
The upcoming Draft 2026 Lists will translate policy into actual liabilities and show how the tax burden has shifted. Forecasts suggest strong uplifts for industrial and logistics properties and more modest increases for retail although many pubs are still expected to move upward from their pandemic era valuations.
Alex Probyn at Ryan said: “The Autumn Budget will define the rules of the system but only once new rateable values are published will businesses see the full picture. Only then will the real winners and losers be known.”
The Budget is expected on 26 November with Draft Lists due shortly afterwards.
