Rates review must prevent ‘chaotic’ 2029 revaluation

BBPA head of policy and pub rates expert Morgan Schondelmeier told the Morning Advertiser (MA) the review needed to better reflect the economic conditions facing the pub market and give operators more certainty over future bills.

The independent review, led by business rates specialist Jerry Schurder, will consider how pubs and hotels are valued for business rates in England and Wales. It is expected to report back by the end of March 2027, with recommendations feeding into the next revaluation in 2029.

Turnover issue

Schondelmeier said one of the biggest problems with the current system was the use of fair maintainable trade, which is based on expected turnover.

She said: “The better a pub does, the more it turns over, the higher their rateable value. When you have high periods of inflation like we’ve had over the last couple of years, your turnover increases. It doesn’t mean your profits are increasing or your business activity is increasing. It just means you’re having to charge more for your products to stay afloat.

She said the BBPA wanted the review to look at the data used to calculate valuations, how it is collected and whether proper adjustments are made for pubs that are under or over trading.

Schondelmeier also said factors such as publican accommodation, fixtures and fittings, and wider trading conditions needed to be properly reflected.

Although the review will not change bills immediately, Schondelmeier said the timescale reflected the complexity of valuing pubs across the country.

She said: “We do have to be realistic about these timescales. But the steps the Government has taken in the meantime to bring down rates through its 15% reduction and freeze, and then Andy Burnham going further on the 20% reduction, really does help. But we need to make sure we don’t have a similar chaotic revaluation in 2029 as we did in 2026.”

She said further action at the October Budget should include increasing business rates thresholds in line with inflation.

Schondelmeier added: “These thresholds haven’t changed since 2017, and that means more pubs are paying higher rates than ever before because they’re just being dragged into paying higher rates.”

Fixed cost

She said business rates remained one of the biggest fixed costs for pubs because operators had to pay them before opening the doors or pulling a pint.

She added: “They can’t adjust their hours. All they really can do is potentially seek to raise prices or cut costs elsewhere. It’s a fixed cost they have to pay, so it’s really important to get right.”

The BBPA will submit a full formal response to the review and is also planning to engage with the Government, the review team and other stakeholders.

Schondelmeier said: “We want to go further than just telling them what’s wrong and offer solutions.” She added pubs’ community value should also be recognised, as this was not currently captured by the business rates system.

Wider concerns

The comments come as operators and trade bodies continue to push for broader reform.

Butcombe Group chief executive Jonathan Lawson said the review was a welcome step, but warned the current system placed an “unfair burden” on pubs and hotels compared with other large scale businesses.

He said any action must sit within a wider economic strategy that gives businesses confidence to invest, grow and create jobs.

The Night Time Industries Association (NTIA) also welcomed the review, but said its scope appeared too narrow.

NTIA chief executive Michael Kill said pubs and hotels deserved a fairer system, but added nightclubs, live music venues, bars and entertainment businesses should also have “a seat at the table”.

He said: “You cannot reform the economics of our high streets and night time economy by looking at only part of the ecosystem.”