Hospitality businesses across England are facing a crippling near-doubling of their business rates bills over the next three years, according to a fresh industry analysis. This surge comes despite Chancellor Rachel Reeves's recent claim to have delivered a tax cut for the sector in her Budget.
Stark Figures Reveal Soaring Tax Burden
The research, conducted by the sector's leading body UK Hospitality, examined government data and found the average pub, restaurant, or hotel will see its business rates bill skyrocket. The commercial property tax is set to jump by 15 per cent to £20,835 next year.
This increase is just the beginning. By the following year, the average bill is projected to be 48 per cent higher than current levels. The climb culminates in 2028, with the typical hospitality property expected to pay £40,409 annually. This means that in just three years, venues will be paying nearly double, an extra £32,714 per property they operate.
Why a Promised Tax Cut Led to Higher Bills
The dramatic rise stems from a government overhaul of the business rates system, intended to rebalance the burden towards traditional high street firms. The tax is calculated using a 'rateable value' – an estimate of a property's rental value – set by the Treasury's Valuation Office Agency (VOA).
In her Budget speech, Chancellor Rachel Reeves announced a 5p cut to the business rates multiplier for hospitality and retail, stating it brought the rate to its "lowest… since 1991". However, this cut was simultaneously undermined by the VOA's decision to significantly increase the rateable values of most hospitality venues.
The result is that while the tax *rate* is technically lower, the amount being taxed has risen so much that the final bill balloons. UK Hospitality had warned the Treasury to expect these hikes, arguing that a much larger discount was needed to offset Covid-era valuations.
Industry Backlash and Political Fallout
The government's move has triggered fierce opposition from business owners. Allen Simpson, chief executive of UK Hospitality, stated: "Business rates tax hikes will hit every city, town, village and high street in the country. Unfortunately, not one area of the country is spared."
This discontent has spilled over into direct action. As part of a campaign to force a government U-turn or secure a cut to VAT, hundreds of pub landlords have barred Labour MPs from their premises. The industry argues it is being unfairly squeezed compared to international competitors.
The Treasury was approached for comment on the analysis.
