Business Rates Relief Still Leaves Pubs Facing a 52% Cost Shock

New analysis from The Oxford Partnership reveals that the government’s latest business rates discount will still leave the average public house facing a near 52% increase in business rates compared with the COVID support period, adding further pressure to a sector already experiencing sustained outlet closures.

Oxford data shows that during COVID, the average pub paid £8,195 in business rates after emergency discounts and multipliers were applied. Following the November 2025 Budget, this rose sharply to £14,625, reflecting the withdrawal of COVID era support and the impact of higher rateable values.

While Chancellor Rachel Reeves has since announced a new discount, reducing the average bill to £12,431, Oxford analysis confirms this still represents an increase of £4,236 per pub, equivalent to a 51.8% rise versus COVID support levels.

“This is not a return to affordability. It is a partial easing of a much larger cost shock,” said Alison Jordan, CEO The Oxford Partnership.

“For many pubs, business rates are now significantly higher than they were when trading conditions were far more supportive.”

Closures Continue as Fixed Costs Reset

Oxford data shows that rising fixed costs are translating directly into outlet losses. Since the October 2024 Budget, the UK has seen an average of c.2.3 hospitality outlet closures per day, as business rates, wages and energy costs continue to outpace revenue growth.

While consumer demand has not disappeared, it has become increasingly concentrated into peak moments, leaving many venues struggling to cover higher overheads across the full trading week, particularly independent pubs and community locals with limited ability to pass on costs.

“The pace of closures tells its own story,” Jordan added.

“Venues are not failing because people do not want to go out. They are failing because fixed costs have reset at a level the market cannot sustain.”

Uneven Support Across Hospitality

Oxford analysis also highlights that the proposed business rates discount applies only to part of the hospitality sector.

• Hotels and restaurants do not benefit from the relief, despite facing similar cost pressures.
• These sectors are already experiencing softer midweek demand and rising labour costs.
• The result is an uneven policy response that risks shifting financial pressure across the hospitality ecosystem rather than addressing it.

“Hospitality works as a connected system,” said Jordan.

“Supporting pubs while leaving hotels and restaurants exposed simply moves the problem elsewhere.”

A Warning, Not a Solution 

Oxford concludes that while the discount provides short term relief, it does not represent a structural fix for hospitality business rates.

Without broader reform, Oxford warns that closures are likely to continue into 2026, investment will remain constrained, and more venues will operate in a state of financial fragility.

“This relief is better than nothing, but it is not enough,” Jordan concluded.

“If we want hospitality to survive and invest for the future, business rates reform must reflect today’s trading realities, not pre pandemic assumptions.”