UKHospitality: rates bills set to nearly double by 2029
Hospitality venues in England could see their business rates bills rise by £32,714 (US$44,000) on average over three years, according to trade body UKHospitality.
The 40% business rates relief for hospitality, leisure and night-time venues, which was introduced during the pandemic, will be abolished from April 2026.
This is despite the permanently lower tax rate introduced in last month’s Budget for more than 750,000 retail, hospitality and leisure properties. The government insists the tax cut is worth nearly £900 million (US$1.2 billion) a year and highlights that this new rate is permanent, providing business with certainty and stability.
The new multiplier system for business rates will offer a tax cut depending on the rateable value of a business, with a lower rate for smaller venues. Many venues saw big increases in their rateable value in April 2023 due to post-Covid recovery, which was based on 2021 values.
The government has also implemented a three-year transitional relief cap for business rates.
Even when considering the lower tax rate, UKHospitality has estimated that the average hospitality venue in England will be hit with a £23,961 (US$32,187) rates bill for 2026/27 – a 15% increase on the current average of £20,835 (US$28,000).
For the following year, businesses are set to pay £30,849 (US$41,440) – equal to a 48% rise or £10,014 (US$13,453), compared to today.
In 2028/29, England-based hospitality venues face a bill of £40,409 (US$54,285), which is nearly double (94%) when compared to the current average.
UKHospitality is calling on the government to increase the business rates discount for hospitality to 20p, after chancellor Rachel Reeves announced only a 5p reduction in the latest Budget.
Allen Simpson, chief executive of UKHospitality, said: “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.
“The Treasury were warned, by UKHospitality, to expect significant increases to rateable values, due to the previous revaluation being based on valuations during Covid.”
The government has stated that properties will be revalued in business rates every three years. April 2026 is when the next values take effect and will be based on property values in 2024.
‘Simply unsustainable’
Simpson noted: “We laid out, in no uncertain terms, that the maximum 20p discount to the multiplier was absolutely necessary to offset these rises in rateable values.”
“It did not heed that warning, and now the level of business rates increase over three years will be simply unsustainable for many businesses to absorb.”
Simpson warned that provisional relief will “soften” any sudden impact but “does not solve the problem”.
He continued: “Price increases, job losses and business closures will all accelerate – that’s bad news for local economies, local jobs and local high streets.”
Simpson urged the government to follow through with its pledge to support hospitality and avoid a tax on the industry.
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