The government has commissioned an independent investigation into business rates applied to pubs and hotels in England and Wales, potentially setting the stage for changes in how their valuations are handled.
Independent specialist to lead government probe into rating system
The UK Treasury has selected Jerry Schurder, well-known for his expertise in business rates, to conduct a comprehensive review of rate calculation processes impacting pubs and hotels in England and Wales. Previously a policy chief at Newmark UK, Schurder will examine current assessment approaches and deliver a report by March 2027. The review process invites submissions and perspectives from landlords, hoteliers, and business proprietors.
For years, pub owners have contended that the sector bears a disproportionately high business rates burden, a result of the unique valuation method in use. While retail outlets use different criteria, pubs are subject to the “Fair Maintainable Trade” model, directly connecting their rates bills to turnover. This method translates increased earnings into higher rates, and the British Beer and Pub Association (BBPA) has warned that this financial pressure has jeopardized the viability of many establishments.
Hospitality sector struggles as closures continue despite some relief
Recent data released by the BBPA reports that 161 pubs were shuttered in England, Scotland, and Wales during the first quarter of the current year, leading to the elimination of around 2,400 jobs. Besides escalating business rates, businesses in hospitality have also seen costs rise due to higher minimum wages and increased National Insurance contributions.
This review unfolds after the government unveiled a 20% cut in business rates for pubs, social clubs, and live music venues in England, effective in April. Coming after criticism following a reduction in pandemic support, this latest measure aims to further ease the financial load, supplementing a 15% relief introduced for pubs and music venues in early 2026. The new 20% discount is set to add to this existing support, though it will exclude “the very largest” live music venues, and there remains ambiguity over eligibility—especially for venues established on the borderline between categories. The government plans to clarify requirements in Chancellor John Healey’s first Budget later this autumn.
Industry experts and political leaders respond to government action
James Murray, Financial Secretary to the Treasury, emphasized that the aim is to build “a fairer system for the future.” Craig Beaumont from the Federation of Small Businesses endorsed Schurder’s appointment, describing it as bringing “crucial heavyweight business rates expertise” to the Treasury, but also advocated for a higher threshold for small business rates relief so that more companies could qualify for exemption.
The British Retail Consortium’s Tom Ironside also responded positively, while cautioning against letting retailer interests fall by the wayside during the assessment.
Political reaction has been divided: Shadow Chancellor Sir Mel Stride criticized the government, labeling the review as “far too late for a sector this Labour government has already done its best to kill off,” referencing increased regulation and taxation. Meanwhile, Daisy Cooper, Treasury spokesperson for the Liberal Democrats, supported the review’s launch as “long overdue,” while simultaneously urging for an emergency VAT reduction and reversals of recent changes to employment taxes, both of which she said have heavily impacted hospitality businesses.
Scheduled to inform the next reassessment of business rates in 2029, this review could bring about major changes in the way pubs and hotels are valued. Whether these adjustments will sufficiently tackle the challenges facing both the hospitality industry and other affected businesses remains uncertain, especially as companies closely track the government’s position on eligibility and future relief measures with operational costs on the rise.