England’s Hospitality Businesses Set To Reinvest £47.2m Following Business Rates Cut

England’s pubs, clubs and live music venues could use the Government’s forthcoming business rates cut to unlock tens of millions of pounds of new investment, according to research from money.co.uk

Analysis of Valuation Office Agency (VOA) data found that the median live music venue qualifying for the relief will save £2,502 a year, while the median pub will save £1,795 and the median social club £936.

A survey of 500 hospitality business owners conducted by money.co.uk explored what businesses plan to do with those savings — and found widespread appetite for reinvestment and growth.

The government’s business rates discount for pubs and live music venues represents one of the most meaningful reductions in business costs for the hospitality sector in recent years. For many qualifying businesses, the relief amounts to the equivalent of several months’ worth of energy bills or a part-time member of staff.

There are approximately 39,500 pubs in England, with a median rateable value of £23,500. After applying the relevant business rates multiplier and the 20% discount, the median pub will pay £5,835 in business rates this year — saving £1,795 compared to what they would otherwise owe. For live music venues and nightclubs meeting the qualifying criteria, the median saving is higher at £2,502 a year. Social clubs, of which there are around 9,450 in England, will save a median of £936.

66% of hospitality business owners surveyed said they consider the saving to be very or fairly significant for their business.

When asked what they would do with the money, 57% of respondents said they would reinvest it in the business. Among those planning to reinvest, business expansion was the most popular use, ahead of new equipment and marketing. 31% said they would save the money as a cash buffer, providing greater financial resilience, while 22% plan to use it to pay down existing debt.

Beyond the direct saving, the research suggests the relief could unlock broader investment activity across the sector. 43% of hospitality business owners said that a business rates cut would make them more likely to borrow money to grow their business — with 11% saying “yes, definitely” and a further 32% saying “yes, possibly”.

Despite this appetite for growth, many hospitality businesses have historically struggled to access or feel confident about finance. 51% of business owners said they had previously missed out on a growth opportunity because they couldn’t access finance or didn’t feel confident about borrowing.
The biggest barrier cited was concern about taking on debt, followed by weak cash flow/uncertainty about taking on repayments and worrying about being approved due to credit checks .

Tom Luth, CEO of money.co.uk said: “For pubs, social clubs and live music venues, this business rates relief represents a welcome opportunity to ease cost pressures. For a sector that has faced sustained pressure on margins in recent years, even a saving of £1,795 or £2,502 a year can make a meaningful difference.”

“Our research shows that many hospitality businesses are looking to use these savings to support their next steps. From investing in their premises and teams to improving cash flow, the relief could give operators greater flexibility as they manage costs and plan for the future.”

“However, cost pressures are not the only challenge facing hospitality businesses looking to grow. Concerns around credit checks are still holding some owners back from exploring finance, with a third telling us they feel less confident about borrowing because of them. But checking eligibility doesn’t have to affect your credit score.