Government Signals Relief for Pub Industry with Planned Business Rates Reform

The Treasury has confirmed plans to introduce permanently lower business rates multipliers for pubs and other hospitality venues, delivering welcome news to an industry that has endured years of mounting financial pressure since the pandemic.

The announcement, which will form part of the Government’s Autumn Budget later this year, represents a significant shift in policy that could provide crucial relief to pub operators struggling under what industry leaders have described as an “unfair” taxation system.

The Treasury confirmed plans to introduce permanently lower multipliers for retail, hospitality and leisure (RHL) properties, including those on the high street, with the new approach taking into account recent property revaluations alongside current economic conditions.

The move comes as pub giant Greene King has issued an urgent plea to the government for help, highlighting the severity of challenges facing the sector.

Greene King CEO Nick Mackenzie has been particularly vocal in criticising the current system, arguing that business rates tax should be charged on profits, rather than on property. 

The business rates system, which calculates bills by multiplying a property’s rateable value by a government-set multiplier, has long been criticised as disproportionately penalising hospitality businesses. Unlike online retailers, pubs cannot easily relocate to lower-rated premises, making them particularly vulnerable to rate increases.

Nick Mackenzie said reduced property tax payments were needed to drive investment and new jobs amid rising pub closures across the UK. His calls for reform have been echoed throughout the industry, with operators arguing that the current system fails to reflect the economic realities facing traditional hospitality venues.

The Government’s new approach will consider revaluation outcomes as well as the wider economic and fiscal context when setting future multiplier rates. This represents a more nuanced approach than the current system’s rigid application of standard rates across different business types.

Crucially, the Treasury has indicated that the new RHL rates will not be subject to the existing £110,000 per business cash cap that currently limits relief, potentially offering more substantial support to larger operators.

The announcement has been cautiously welcomed by industry observers, though many stress that the detail will be crucial. The pub sector has endured multiple challenges since 2020, from pandemic closures to rising energy costs and changing consumer habits.

The scheme delays business rates increases for one year after certain property upgrades. But it only covers structural changes and requires the same tenant throughout the works and for a year after – a major barrier in a sector with frequent turnover, highlighting how current relief mechanisms often fail to address practical industry needs.

The Government plans to publish an interim report in the coming weeks that will outline the detailed proposals ahead of the Autumn Budget. This document is expected to provide clarity on the scale of reductions and implementation timeline.