Business Rates Increase to Impact Small Hospitality Venues By £318 Million

UKHospitality has released an analysis indicating that small hospitality venues in the UK will face a £318 million increase in business rates over three years. This increase affects properties with a rateable value below £51,000 and is expected to significantly impact the sector.

The analysis projects that business rates will rise by £38.6 million in the fiscal year 2026/27, marking a 13% increase. The following year, 2027/28, will see a further rise of £110.6 million, or 38%. By 2028/29, the rates are expected to rise by £168.5 million, representing a 58% increase. These cumulative increases total £318 million over the three years.

The report highlights that despite a reduced multiplier, business rates for the average pub will increase by 76%, and for the average hotel, by 115% over the same period. In contrast, distribution warehouses, commonly used by online retailers, will see a 16% increase, and supermarkets will experience a 4% rise.

UKHospitality has communicated these findings to Members of Parliament, stating that the increases contradict the government's previous commitments to support high street businesses. The organization argues that the policy disproportionately affects small hospitality businesses while offering more favorable conditions to online retailers and supermarkets.

In response to these findings, UKHospitality is urging the government to consider two measures: increasing the business rates discount for hospitality to the full 20p allowed by legislation and committing to freezing business rates revaluation levels at 2023 levels for hospitality businesses.

The organization has expressed concerns that without intervention, the sector could face business closures, job losses, and reduced investment. The potential impact on youth employment is also highlighted as a significant concern.

UKHospitality's communication to MPs emphasizes that the current trajectory of business rates reform is contrary to the government's stated goal of leveling the playing field between high street businesses and online giants. The organization is advocating for urgent action to address the disparity and mitigate the potential negative impacts on the hospitality sector.