What was announced?
The Government announced 15% business rates relief (Tuesday 27 January) for 2026-2027, which is on top of any transitional relief or Supporting Small Business Relief pubs are eligible for.
Transitional relief was being applied in an attempt to soften the blow of increases, and meant that in the year 2026 to 2027, pub with a rateable value of below £20,000 would only see an increase in rates of 5%, while those under £100,000 would see increases capped at 15% and above £100k, it was capped at 30%.
However, the application of a further 15% discount to those 2026 increases means that those under £100,000 rateable value have seen those capped increases wiped out, and will potentially see their rates bills fall. Those with a rateable value above £100,000, however, will still see an increase, but this has been brought down to 15% from 30%.
Bills will then be frozen in real terms until 2029 meaning they will only increase by inflation for 2027 to 2028 and 2028 to 2029.
What has happened up until now?
Current support (to the end of March 2026) has been the 40% retail, hospitality and leisure relief.
What’s going on with multipliers?
Currently, there are two multipliers - standard and small.
From 2026/2027, there will be five multipliers. Two of these are designed specifically for retail, hospitality and leisure properties including pubs.
Pubs with a rateable value of under £51,000 will use a multiplier of 38.2p while those with a rateable value of between £51,000 and £499,999 will use a multiplier of 43p and for rateable values of above £500,000, it will be a new, non retail, hospitality and leisure-specific higher multiplier of 50.8p.
Is there any relief?
The announcement this week means pubs and live music venues will benefit from 15% business rates relief in 2026 to 2027, as listed above, meaning those under £100,000 rateable value are likely to see a small fall in rates bills for 26/27 and the rest of the increases frozen for the following two years.
This is regardless of whether their business rates liability would otherwise rise or fall under the revaluation or the lower retail, hospitality and leisure multipliers.
The discount is applied to the chargeable amount regardless of whether or not transitional relief is required.
This is on top of transitional relief or supporting small business relief.
Which venues are eligible?
This new support is applicable to pubs and live music venues in England only.
Pubs have to meet all of the following criteria:
- Be open to the general public
- Allow free entry other than when occasional entertainment is provided
- Permit drinking without food having to be consumed
- Allow drinks to be purchased at a bar
The Government outlines the meaning of a pub does not include restaurants, cafés, nightclubs, snack bars, hotels, guest houses, boarding houses, sporting venues, festival sites, theatres, cinemas, museums, exhibition halls and casinos.
For live music venues, these are described as:
- Wholly or mainly used for the performance of live music for the purpose of entertaining an audience
- But can be used for other activities if this includes activities that are ancillary or incidental to the performance of live music (such as the sale of food and drink to audience members) and do not impact the primary use of the premises for the performance of live music.
- Properties are not a live music venue for the purpose of this relief if it is wholly or mainly used as a nightclub or theatre.
How does it impact pubs with a rateable value up to £20,000?
Those with a rateable value of up to £20,000 (or £28,000 in London) will see a maximum of a 5% increase.
What about pubs with a rateable value from £20,001 to £100,000?
These ‘medium’ properties with a rateable value of £20,001 to £100,000 have a 15% increase cap.
What’s the effect on those with a rateable value of more than £100,000?
Properties that are ‘large’ with a rateable value above £100,000 will see a maximum of a 30% rise.
Are there any examples?
One example given on the Government website is a pub with a rateable value that is increasing from £30,000 to £39,000 from this April (in the ‘medium’ bracket).
The pub is currently claiming 40% retail, hospitality and leisure relief for 2025 to 2026.
For the 2025 to 2026 year and before retail, hospitality and leisure relief, this pub’s business rates bill is £14,970 (the £30,000 current rateable value x 49.9p small business multiplier).
The relief would be worth 40% of £14,970, which equals £5,988. This means the final bill for 2025 to 2026 is £14,970 (bill without relief) minus £5,988 (relief), which equals £8,982.
For the coming year (2026 to 2027), the rateable value of the pub has increased to £39,000 from £30,000 due to the 2026 revaluation.
This pub is eligible for the small business retail, hospitality and leisure multiplier of 38.2p meaning before any reliefs, the business rates bill would be £39,000 (new rateable value) x 38.2p (new multiplier), equalling £14,898.
For properties losing the retail, hospitality and leisure relief in 2026 to 2027, the Supporting Small Business scheme is applicable and means this pub’s bill increase for 2026 to 2027 is capped at the higher of £800 or the relevant Transitional Relief cap, which is 15% in this example.
For the 2025 to 2026 bill, 15% of £8,982 (the final bill for the period), would be £1,347 - higher than the £800 cap.
This means the 15% cap applies therefore, £8,982 + £1,347, which equals £10,329.
The 15% relief is then applied - £10,329 x 15% equals £1,549.
Therefore, subtracting the relief from the £10,329, which is £8,780 - this figure is the final bill for next year (2026 to 2027).
Going forward, for 2027 to 2028, this pub’s £8,780 bill will increase with inflation.
Should inflation go up by 2% in September 2026, the bill would increase to £8,956.
If the same inflation figure is the case in September 2027, the bill would go up to £9,135.
How can you work out your bill?
The Government website has a tool for operators to use to estimate business rates liability which is available here [tax.service.gov.uk].
What else?
According to global tax firm Ryan, this emergency measure will cut the bill for an average pub by more than £12,500 over the three years of the 2026 revaluation.
The company also stated that despite a sharp increase in rateable values at revaluation, the average pub will now pay less than it does today from April 2026, with bills remaining largely flat in real terms for the remaining two years.
