What are the details of the new business rates relief legislation for pubs?
Pubs and music venues will receive a discount of 15% off their business rates. £1650
The support package announced by Treasury Minister Dan Tomlinson is reported to be worth around £100million per year, and will continue over three years. Business rates will be frozen at this lowered rate until 2029.
The relief will commence the start of the 2026/2027 financial year. The support is set to be worth £1,650 per pub per year on average.
This temporary relief is meant to demonstrate the government are walking the right path toward a transformative long-term solution. But is this short-sighted announcement enough to stave off the huge onset of bills on the horizon for hospitality?
How are business rates calculated?
A business’s tax rates are calculated depending upon the turnover, value of the property and the type of business, set against the national multiplier. Multipliers are effective from April 1st.
Business rates reductions will be included automatically. The 15% discount will apply to your business’s individual tax bill, and the rate will then be frozen for three years – offering pubs and music venues a welcome relief.
Who will the business rates relief apply to?
The 15% discount will only apply to pubs and music venues. It will not apply to other hospitality venues or recording studios. Restaurants, cafés, nightclubs and bars, sporting venues and concert halls will all not receive the relief.
Government information states thatrelief will be awarded to pubs that meet all of the following characteristics:
- open to the general public,
- allows free entry other than when occasional entertainment is provided,
- allows drinking without requiring food to be consumed,
- permits drinks to be purchased at a bar.
Or music venues that are mainly used for the performance of live music.
Local authorities will already have an understanding of all the pubs and music venues in their area, and where eligibility is unclear, will have the final say on any business rates discrepancies.
Is the new business rates relief enough?
For pubs and music venues the news will no doubt be welcome. However the changes do little for the wider sector. UKHospitality, in response of the announcement, has contradicted the relief by saying: “an average pub will pay £12,900 more in business rates over three years, as rates climb 76% for pubs and 115% for hotels.”
The hospitality industry is still reeling from the November budget which included a major business rates increase, and minimum wage increase which has led to closures and job losses.
One pub closed every day in 2025 in England and Wales, according to the government’s own statistics. Pubs numbers have dropped from almost 39,989 to 38,623. Many industry bodies have pleaded for the government to widen the scope of the relief. Other parts of the hospitality and nightlife sectors face further tax increases. Bills are set to increase by £111,000 on average over the next three years.
Major hospitality groups are already buckling under the strain. TGI Fridays and Leon have entered insolvency. Revolution Bars have sent 14 venues into administration as well as 6 Revolution de Cuba sites.
While these tax changes may help keep the doors open for many, it will not prevent a severe cut to profits this year and in following year. Pubs and the hospitality industry as a whole is less likely to grow, and employment opportunities in the sector will continue to decline.