The UK government has launched an independent review into how business rates are calculated for pubs and hotels in England and Wales, promising to make the system fairer. The Treasury has appointed Jerry Schurder, a former business rates policy lead at advisory firm Newmark UK, to lead the review, which will report back by the end of March 2027. The timing means any recommendations could be applied before the next revaluation in 2029, according to the Treasury.

The review follows a 20% cut in business rates for pubs, social clubs and live music venues in England, announced last month by Chancellor Andy Burnham, to come into effect from April next year. That cut was part of a series of measures aimed at easing cost pressures on the hospitality sector. The government said last month that the average pub would save an additional £1,650 in 2026/27, with around 75% of pubs seeing their bills fall or remain flat, as reported by Kent Online.

Pressures on the sector

The review comes amid growing concern for the hospitality sector. The British Beer and Pub Association (BBPA) said 161 pubs closed in the first three months of this year across England, Scotland and Wales, equating to the loss of around 2,400 jobs. Industry figures suggest two pubs are closing a day across Britain, hit by higher taxes, wages, energy and food costs. Rising business rates are cited as one issue, but complaints also include increases in National Insurance and changes to the minimum wage, which have made staff costs more expensive for businesses.

The BBPA argues pubs are valued differently for business rates than retail venues. Instead of being based just on floor area, pubs are judged by something called Fair Maintainable Trade, a measure that considers turnover. This means when a pub's turnover increases, so does its rates bill.

The launch of the review was welcomed by trade bodies representing pubs and hotels. Emma McClarkin, chief executive of the British Beer & Pub Association, said the review was "sorely needed and hugely welcome" as pubs had for years "paid a disproportionately higher business rates bill which has ground down their ability to keep the doors open." Allen Simpson, chief executive of UKHospitality, said it was positive the government was looking seriously at the valuation methodology, adding that business rates remain a significant burden for hospitality businesses and the system needs to better reflect the realities of the sector.

Craig Beaumont of the Federation of Small Businesses (FSB) also welcomed the appointment of Jerry Schurder, saying he would bring "crucial heavyweight business rates expertise into the Treasury." Beaumont argued the government needed to address the wider business rates system and exempt more smaller firms by lifting the relief threshold for small businesses.

Tom Ironside from the British Retail Consortium said it was "vitally important that the needs of retailers are not overlooked" in the review, reflecting calls from non-hospitality businesses, as reported by the BBC and Birmingham Live.

Political and industry reaction

The review has drawn criticism from the opposition, with Shadow Chancellor Sir Mel Stride calling the review "far too late for a sector this Labour government has already done its best to kill off." He said tax hikes on business premises and jobs, alongside "job-destroying regulation" in the Employment Rights Act, have left many hospitality businesses on the brink.

Liberal Democrat Treasury spokesperson Daisy Cooper said reform of business rates was "long overdue" and called for an emergency VAT cut and a reversal of the jobs tax changes which, she said, have "hammered" hospitality in particular. She added that the review must not be an excuse for not taking bolder action to save high streets.

Nick Mackenzie, chief executive of Greene King, said fundamental reform was urgently needed because the current system has barely changed in three decades and overlooks how markets and custom habits have altered. Neal Jones, President for Europe at Marriott International, said the current valuation methodology creates a significant burden for hotels, and supports an examination ensuring the system is fair and transparent.

Jerry Schurder, the review's leader, said he looks forward to hearing from businesses, representative bodies and valuation professionals as he assesses the current methodologies and whether they remain fit for purpose.

Background and local impacts

The review comes after both pubs and hotels saw significant increases in their rateable values at this year’s revaluation, largely due to the ending of pandemic-era valuation measures. Under the previous chancellor, the government had scaled back business rate discounts that were in force during the Covid-19 pandemic, meaning that from April this year rates no longer applied.

Earlier in 2026, following criticism from the hospitality industry, the government had already introduced a 15% cut in business rates for pubs and music venues, followed by two-year real-terms freeze, as reported by Kent Online. The rates discount announced last month will not apply to the "very largest" live music venues, and there has been some confusion among businesses over eligibility, according to the BBC.

The government said it is concerned that rateable values do not reflect the realities of the current landscape and wants to make the system fair and transparent so that pubs and hotels can plan better for the future.

The government has stated it will announce further reform, including small business rates relief, at the Budget on 28 October. A Call for Evidence has been launched, with submissions to be sent to PubsHotels.Valuation@hmtreasury.gov.uk by midnight on 16 October.