On 24 August 2026, HM Treasury launched an independent review of how business rates are calculated for pubs and hotels, led by independent expert Jerry Schurder. A Call for Evidence is open until Friday 16 October 2026 (submissions to [email protected]), with a report due by the end of March 2027. The review looks at valuation methodology ahead of the next revaluation in 2029. Your 2026 valuations are unaffected.
If you own a pub, hotel, restaurant or bar, this matters for two reasons: your future bills, and the chance to shape how the system values your premises. Below we explain how business rates work, the cuts already coming, a worked example in pounds, and exactly what to do before the deadline.
What is the business rates review for pubs and hotels?
The review is a Treasury-commissioned look at how the Valuation Office Agency (VOA) sets rateable values for hospitality premises. The concern is that the current approach does not reflect the market realities of running a pub or hotel, so the review aims to build a fairer system before the next revaluation in 2029.
It is led by independent expert Jerry Schurder. The Call for Evidence launched on 24 August 2026 and stays open until Friday 16 October 2026, with the final report due by the end of March 2027. Crucially, this is about methodology for the future. It does not change your 2026 valuation or your current bill.
How do business rates work?
Business rates are a tax on most non-domestic properties, including pubs, hotels, restaurants, shops and offices. The basic sum is simple:
Your bill = rateable value x the multiplier.
The rateable value is set by the VOA and broadly represents the property's open-market annual rent. The rateable values on the current rating list are based on a valuation date of 1 April 2024. The multiplier is a pence-in-the-pound figure set by government that is applied to your rateable value to produce the gross bill, before any reliefs are taken off.
Reliefs then reduce what you actually pay. For many smaller premises the most valuable of these is small business rate relief.
What is small business rate relief and do you qualify?
Small business rate relief can wipe out your bill entirely or cut it substantially. Here is how it works on a single property:
- Rateable value of £12,000 or less: you get 100% relief, so you pay nothing.
- Rateable value of £12,001 to £15,000: relief tapers gradually from 100% down to 0%.
- Rateable value of £15,000 or more: no small business rate relief on this scheme.
You may qualify where your rateable value is under £15,000. The table below shows roughly how the taper bites.
| Rateable value | Small business rate relief (approx) | What you pay |
|---|---|---|
| £12,000 or less | 100% | Nothing |
| £13,500 | About 50% | About half the bill |
| £14,000 | About 33% | About two-thirds of the bill |
| £15,000 or more | 0% | The full bill |
Because the relief tapers on the rateable value (not the final bill), the exact percentage depends on where your rateable value sits in the £12,001 to £15,000 band. If yours is close to £12,000, it is worth checking whether a change could tip you into full relief.
What business rates cuts have pubs already been given?
Separately from the review, the government has already announced targeted support for hospitality. Pubs, social clubs and live music venues are getting:
- A 15% cut to business rates from April 2026.
- A further 20% cut from April 2027, on top of the 2026 reduction.
- A two-year real-terms freeze alongside those cuts.
The effect so far: the average pub saved £1,650 in 2026/27, and around 75% of pubs saw their bills fall or stay flat. The April 2027 cut is the one to budget for next.
Why did pub and hotel bills jump at the 2026 revaluation?
At the 2026 revaluation, many pubs and hotels saw significant increases in their rateable values. This followed the ending of pandemic-era valuations, which had held some values artificially low. As trading recovered, rents and turnover recovered too, and the VOA reflected that in the new list. It is precisely this jump, and the way hospitality is valued, that the new review is designed to examine before 2029.
Worked example: what the cuts and reliefs mean in £
Take a mid-sized pub with a rateable value of £13,500. That sits inside the small business rate relief taper, giving roughly 50% relief.
Suppose the gross bill for this pub (rateable value times the multiplier) works out at an illustrative £6,700 for the year. We are not quoting the multiplier here, so treat the gross figure as illustrative; the point is how the reliefs and cuts stack:
- Gross bill: £6,700
- After roughly 50% small business rate relief: about £3,350
- Sector cuts on top: a pub also benefits from the 15% (2026) and 20% (2027) reductions where they apply, which is how the average pub landed a saving of around £1,650 in 2026/27.
Now compare a second pub with a rateable value of £11,500. That is under £12,000, so it gets 100% small business rate relief on a single property, and pays nothing before the sector cuts are even considered. The lesson: a difference of a few thousand pounds in rateable value can be the difference between a full bill and no bill at all, which is why checking your figure with the VOA is the single highest-value action here.
What did the Treasury minister say?
James Murray MP, Financial Secretary to the Treasury, said: "Pubs and hotels are vital for communities and bringing growth to every postcode. Last month we announced tax cuts for pubs to give them the breathing room they need. Today we are going further with a rethink of valuations."
How do you respond to the Call for Evidence?
Any hospitality owner, trade body or adviser can submit evidence. Submissions go to [email protected] and must be in by Friday 16 October 2026. If your rateable value rose sharply at the 2026 revaluation, or if the valuation method does not reflect how your business actually trades, this is your chance to put that on record before the 2029 revaluation is designed. Practical, evidenced examples (your turnover, your rent, your rateable value history) carry more weight than general complaint.
What should hospitality owners do now?
- Check your rateable value with the VOA. Confirm the figure on the current list (based on the 1 April 2024 valuation date) is correct and reflects your premises. An error here overstates every future bill.
- Test your relief position. If your rateable value is under £15,000, make sure small business rate relief is being applied. If you are near £12,000, quantify what full relief would save.
- Respond to the Call for Evidence by 16 October 2026 if the valuation approach is hurting you.
- Budget for the April 2027 cut so your cashflow forecast reflects the lower liability, not the current one.
- Sweep your other running costs. Rates are one line; make sure you are also reclaiming VAT correctly and claiming every allowable cost. See our guides on VAT on food, drink and hospitality, the 5% versus 20% VAT rules on your energy bills, and the common expenses owners forget to claim.
If you run a pub, hotel, restaurant or bar and want the numbers checked properly, Zmartly's accountants for hotels and restaurants can review your rates position alongside your VAT. Our VAT services make sure the hospitality rates and reliefs are applied correctly too.
Book a free call with Zmartly and we will sanity-check your rateable value, your reliefs and your April 2027 forecast in one go.
Frequently asked questions
Does the business rates review change my 2026 bill?
No. The review looks at valuation methodology ahead of the next revaluation in 2029. The 2026 valuations are unaffected, so your current bill stands. The review's report is due by the end of March 2027.
How much has the average pub saved on business rates?
The average pub saved £1,650 in 2026/27, and around 75% of pubs saw their bills fall or stay flat. That reflects a 15% cut from April 2026 plus a two-year real-terms freeze, with a further 20% cut coming from April 2027 for pubs, social clubs and live music venues.
Do I qualify for small business rate relief?
You get 100% relief if your rateable value is £12,000 or less on a single property. Between £12,001 and £15,000 the relief tapers from 100% down to 0%, so you may still qualify with a rateable value under £15,000. Check your rateable value with the VOA to confirm.
How do I respond to the Call for Evidence?
Email your submission to [email protected] by Friday 16 October 2026. Include concrete evidence, such as your rateable value history, rent and turnover, to show how the current valuation approach affects your business.
