Government Announces Rate Relief Support Package for Pubs

Pubs across England are set to benefit from a new package of government support that promises business rates relief and longer-term stability for the sector.

Under measures announced by the Treasury, licensed premises will see a 15% reduction in newly issued business rates bills from April, followed by a real-terms freeze lasting two years. Ministers say the changes are designed to ease cost pressures on operators while a broader review examines how pubs are assessed for business rates in the future.

Officials estimate the typical pub could be better off by around £1,650 during the 2026–27 financial year, with roughly three-quarters of venues expected to see their rates liability either fall or remain unchanged in the next billing cycle. Looking further ahead, the pub trade overall is projected to be paying significantly less in business rates by the end of the decade compared with current levels.

The move forms part of a wider push to revitalise town centres and support bricks-and-mortar businesses. Alongside the rates measures, the government has signalled that a new High Streets Strategy will be unveiled later this year, accompanied by additional reforms to planning and licensing rules aimed at giving pubs greater flexibility to operate and grow.

Chancellor of the Exchequer Rachel Reeves said: “If we’re going to restore the pride in our communities, we need our pubs and our high streets to thrive. We’re backing British pubs with additional support, and our new High Streets Strategy will help tackle the long-term challenges that our much-loved retail, leisure and hospitality businesses have faced. Thriving local businesses, bustling high streets and pride restored in our communities – that’s what this government is delivering.”

Support Whole Sector

Kate Nicholls, Chair of UKHospitality, said: “We welcome the recognition by the Prime Minister and the Chancellor of the scale of the challenges facing the hospitality sector. They have listened to us about the acute cost challenges facing businesses, all of which is impacting business viability, jobs and consumer prices.

“The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution. The Government’s immediate review of hospitality valuations going forward is clear recognition of this.

“The devil will be in the detail, but we need to see pace and urgency to deliver the reform desperately needed to reduce hospitality’s tax burden, drive demand, and protect jobs and growth. We will work with the Government over the next six months to hold their feet to the fire to deliver this.

“This emergency announcement to provide additional funding is helpful to address an acute challenge facing pubs.

“The reality remains that we still have restaurants and hotels facing severe challenges from successive Budgets. They need to see substantive solutions that genuinely reduce their costs.

“Without that clear action, they will face increasingly tough decisions on business viability, jobs and prices for consumers. Those are costs borne by us all, and I hope the Government delivers on its promise to support the whole hospitality sector.”

Relief “Not Covid Measure”

Responding to comments made in the House of Commons today, global tax firm Ryan said it is important to distinguish between pandemic-era support and the original purpose of retail business rates relief.

During Treasury Questions, the Chancellor, Rachel Reeves, said: “I don’t think anyone in this House seriously believes that temporary support during the pandemic should continue infinitely.”

However, leading tax experts point out that retail business rates relief was not created as a temporary Covid measure but was introduced years earlier in response to long-standing structural pressures on the high street.

The relief was first announced at the Autumn Budget in October 2018 and took effect from 1 April 2019. It applied to occupied retail properties, including shops, restaurants, cafés, pubs and hairdressers, providing a one-third (33%) discount on business rates bills for 2019/20 and 2020/21.

Its stated purpose was to address weaknesses already present in the business rates system, including rising fixed costs, declining footfall and changing consumer behaviour, rather than to respond to a temporary economic shock.

When the Covid pandemic struck in 2020, the government expanded this existing relief, temporarily increasing it to 100% as part of emergency support. In subsequent years, that enhanced level of relief was gradually tapered, falling to 40% in the current financial year.

Alex Probyn, Practice Leader – Europe & Asia-Pacific Property Tax at global tax firm Ryan, said: “The suggestion that current business rates reductions are simply Covid support coming to an end isn’t right. Discounts for retail, hospitality and leisure were introduced long before the pandemic because the system was already placing unsustainable pressure on high streets.

Covid temporarily increased the level of support, but it didn’t create it. Framing this as the unwinding of a pandemic measure risks obscuring the deeper structural issues the discount was originally designed to address.”

Valuation Review

The government is also launching a review into how they are valued. The review will be carried out by the government alongside businesses and their representatives as well as valuation experts, ensuring that any decisions that follow will be implemented for the 2029 revaluation.

The Chancellor also announced today £10 million of funding for the Hospitality Support Fund over three years – upped from £1.5 million for one year announced last April – to support pubs across the UK. The additional funding aims to help over 1,000 pubs provide extra services for local communities, including creating community cafes, village stores and play areas to help pubs bring locals and families together and boost their footfall. It will also support people who are furthest from the labour market to move into jobs in hospitality.

As part of further licencing reforms, pubs and other licensed venues will be able to open after midnight for Home Nations’ games in the later stages of this summer’s Men’s FIFA World Cup, meaning more time for fans at the pub while boosting takings behind the bar and supporting jobs in hospitality. The government is also bringing forward a consultation to allow them to open late for other big events such as Eurovision.

The government will legislate later this year to increase the number of temporary events pubs and other hospitality venues can hold to help screen other World Cup games or host community and cultural events.