The UK Government is set to reverse its decision on proposed increases to business rates for pubs, responding to widespread criticism from industry stakeholders. Officials are expected to announce a reduction in the “multiplier,” which is the percentage of a pub’s rateable value used to determine their business rates bill. This change aims to alleviate the financial strain many pubs have been experiencing due to significant increases in their rateable values.
The anticipated adjustment follows mounting pressure from landlords and industry groups. Notably, over 1,000 pubs have taken a stand by banning Labour MPs from their premises, highlighting their discontent with the current business rates structure. According to Treasury officials, the government has acknowledged the challenges faced by the hospitality sector, particularly in light of recent sharp increases in the rateable values of pubs.
A previous announcement in March 2024 included a 5p reduction in the percentage of premises value that businesses pay annually. However, this cut was mostly negated for many establishments by a subsequent upward revision of the rateable values. As a result, pubs have seen their average rates rise by an alarming 76% over the next three years, while hotels faced an even steeper increase of 115%.
The move to alter the business rates policy can be viewed in the context of other recent government U-turns. These include significant changes to policies regarding winter fuel payments, disability benefits, and inheritance tax on farms and family businesses. The government’s decision to reconsider its approach to business rates for pubs may be seen as a response to the increasing pressure from both the public and the hospitality sector.
In summary, the UK Government’s forthcoming announcement marks a significant shift in policy regarding business rates for pubs. This development is expected to provide much-needed relief to a sector grappling with financial difficulties, as the hospitality industry continues to navigate the impacts of rising operational costs and changing economic conditions.
