The Government has already announced a 20% business rates cut for pubs, social clubs and live music venues from April next year.
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That move was welcomed by operators, but many questions remain over how the wider rates system will change, who will qualify for further support and whether other hospitality businesses will be included.
How rates bills are calculated
Business rates are charged on non-domestic properties, including pubs, restaurants, hotels, shops and offices.
For pub operators, the starting point is the property’s rateable value. This is set by the Valuation Office Agency and is intended to reflect the property’s annual rental value.
That figure is then multiplied by the business rates multiplier to create the bill before any reliefs are applied.
In simple terms: rateable value x multiplier = starting rates bill
Reliefs and adjustments can then reduce the final amount payable.
This means business rates are linked to the property itself, rather than directly to turnover or profit. As a result, operators can still face a significant rates bill even when trading conditions are challenging.
What reliefs can apply?
Some pubs qualify for small business rates relief, while others may benefit from sector-specific support such as retail, hospitality and leisure relief, where available.
The level of support depends on several factors, including the property’s rateable value, how the premises is classified and the rules in place for that financial year.
Operators should check their latest rates bill to confirm what reliefs have been applied and raise any concerns with their local authority.
They can also check the property’s rateable value through the Valuation Office Agency and challenge it if they believe it is incorrect.
What has been announced for pubs?
In July, the Government announced a 20% business rates cut for pubs, social clubs and live music venues from April next year.
The Government said the measure would benefit almost 32,000 venues and save the typical pub around £1,100 in the next financial year.
However, the announcement was not the full business rates reform package.
The Government also said it would return to wider reform of the system at the Autumn Budget, including small business rates relief.
Who could miss out?
One concern for operators is whether businesses with a mixed hospitality offer will qualify for support.
Hotels, guest houses and boarding houses were not included in the July announcement, despite many having public bars, restaurants or operating as part of the wider hospitality economy.
This has raised questions for country inns, boutique hotels and pubs with rooms, where the trading model may include accommodation alongside food and drink.
For those businesses, classification and eligibility will be important when next year’s bills are issued.
What could change at the Budget?
On 28 October, the Autumn Budget is expected to set out the next stage of business rates reform.
Key areas to watch include whether the Government changes small business rates relief, whether support is extended to more hospitality businesses and how any reduction in rates income is funded.
Operators have also warned that reform should not simply move the tax burden from one part of the economy to another.
For pubs, the Budget will determine whether the 20% cut is a standalone measure or part of a wider package of support.
What should operators check now?
Ahead of the Budget, operators should check their current rateable value, review what reliefs are already being applied and consider whether their property classification could affect eligibility for future support.
The confirmed 20% cut will offer some support to eligible pubs from April, but the sector is still waiting for clarity on the wider system.
For operators, the key point is that business rates remain a property-based tax. That is why the sector continues to argue that reform is needed to reflect the pressures facing pubs, particularly where bills remain high despite tight margins and rising operating costs.
