Permanent reforms to business rates unlikely in pubs support package

Chancellor Rachel Reeves is expected to reject permanent reforms to business rates as part of her temporary support package, according to reports.

 

The Telegraph said that the government could introduce a more generous time-limited cap on rising rates bills, a carve-out for businesses of certain sizes, and a bigger permanent discount to the business rates multiplier, which is used to calculate taxes paid.

 

However, it is understood there is little scope for a permanent tax relief, further details of which are expected to be revealed on Tuesday, according to the paper.

 

Speaking at the World Economic Forum in Davos last week, Reeves indicated the support package will be limited to just pubs, despite intense lobbying from all sectors of hospitality, especially hotels.

 

Industry sources also suggested to The Telegraph that changes to the multiplier were unlikely for the year ahead, but that this could be reconsidered down the line.

 

Without further support, UKHospitality predicted the average pub’s business rates will increase by 76% in the next three years.

 

Earlier this month, the government revealed it would consider making changes to how pubs’ business rates are calculated in light of the sharp increases to rateable values.

 

During the Autumn Budget, it was announced that from 2026-2027, smaller and standard retail, hospitality and leisure (RHL) businesses will have multipliers of 38.2p and 43p applied to their bills, a 5p cut on the national rates. 

 

In December, hospitality operators told The Caterer they felt “gaslit” by the proposed business rates changes and more than 1,000 pubs are believed to have participated in a campaign banning Labour MPs from their premises since the Budget.

 

The Treasury has been contacted for comment.

 

Photo: Kirsty O’Connor/Treasury