UK hotels primed for business rates relief next year

UK hotels, labelled the ‘biggest losers’ from the business rates revaluation that came into effect this year, are set to receive targeted relief over the next two years.

A review by the Treasury, which is expected to be launch this week, could reverse the business rates revaluation, first introduced in the chancellor’s 2025 autumn Budget, by 2029. Sources told The Times that sweeping cuts to rates bills specifically for hotels could come into effect in 2027 and 2028.

Under current plans hotels will be hit with a 77% surge in rateable value between 2023 and 2026 – significantly higher than that of pubs (29%) and restaurants (14%).

Research from real estate services firm Colliers earlier this year revealed that hotels could see rateable values spike up to 250%, compared to the 76% increase for an average pub.

Reeves is understood to have privately told hotel executives that reductions of hotels’ rateable values will be laid out in this year’s autumn budget following a completion of a wider review of how business rates are levied across hotels and pubs.

It is understood that relief was not introduced earlier because, unlike the targeted relief given to pubs, a review to hotels’ rateable values would have had a material impact on public finances ahead of March’s spring statement.

A Treasury spokesperson said: “We are launching a review into how pubs and hotels are valued. The review will be carried out by the government with businesses, their representatives and valuation experts.

“We will launch the review in due course and any decisions that follow will be implemented at the next revaluation.”

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