Business Rates system no longer fit for purpose
Pub groups have long argued that pubs face higher rates than other similar sized businesses. Pubs are valued differently than retail venues, as instead of floor area, pubs are exclusive measured by turnover. FMT, or Fair Maintainable Value, means pubs are being penalised for their own success. NDML says that the whole business rates system requires reform; in it’s present form it is an unfair cost pressure which – combined with gas, electric, wages and stock costs – is causing an untenable financial situation for nightlife businesses.
According to BBPA, two pubs closed per day in the first half of 2026. 161 pubs closed in the first quarter of 2026, equating to 2,400 jobs. Furthermore, 336 pubs closed in 2025. More than 2,000 pubs have shut since 2020.
Business Rates “Made Fairer”
The treasury and an independent business rates specialist, it has been announced, are looking at how to make the system fairer. This will involve a change of how valuations are calculated for bar and hotel businesses.
In a press release today by the Prime Minister, he reflected on how pubs and hotels have witnessed a significant increase in rateable value, largely due to the ending of pandemic-era valuations. Tax cuts have previously been announced, but the Treasury posits that a review of the valuations demonstrates the government going further to support pub businesses.
In the press release, the PM was keen to cement how the expected cut is being costed, mentioning a review of vape shops and other small businesses who do not make a positive contribution to local communities. He previously promised that he will also increase rates for warehouses owned by online retailers such as Amazon.
Keeping track of the promises made by Government and Andy Burnham
- 20% cut to business rate for pubs socials clubs and live music venues, from April 2027. **
- An additional business rates cut of 15% for pubs and live music venues, April 2026.
- Two-year freeze of business rates beginning 2026/27, seeing 75% of pubs benefit.
- Review of valuation rules before next revaluation date in 2029.
** However the government announced the rates cut would not apply to the largest live music venues.
When announcing his newest promise, Andy Burnham said this is merely the “first step” toward helping the industry. There is still a question as to how far the cuts will extend.
At NDML, we expect more tax cuts, more support – because it is necessary. The sector is buckling under the financial pressures, and the closures of pubs and clubs won’t stop until support is given. Andy’s continued pledge to reduce the cost of living for working people is welcome, but ultimately indifferent, and too small an ambition to make any real difference for the ailing hospitality industry.
NDML are proud partners of the NTIA and Best Bar None. The NTIA is an incredibly involved organisation with a political wavelength. Every one of NDML’s clients receives membership to the NTIA for free. Best Bar None work on behalf of licensed venues, providing resources to benefit management and customer safety. Together, we are hopeful, that more support will be announced.