Welsh on-trade ‘excluded’ from rates reform
UKHospitality Cymru has calculated that the new business rates system in Wales will cost the sector £131 million (US$175m) over three years.
The UK government announced in its autumn Budget last month that there would be a reform of the business rates system.
This includes a special provision for retail, hospitality and leisure businesses.
However, it has since been revealed that many UK venues will pay more under the new system – contrary to the government’s previous claims.
As a devolved nation, Wales is subject to further decisions by its own government. The Welsh government has opted not to include a provision for hospitality in its business rates reform, instead only offering a discount for small- to medium-sized retail shops.
The new system will involve business rates in Wales being updated to reflect current property values on 1 April 2026.
The Welsh government has announced a support package of £116m (US$155m) as transitional relief. This will support businesses whose bills have increased by £300 (US$400) or more. These businesses will have their increases phased in over two years, with 33% of the additional liability paid in the first year (2026-27) and 66% in the second year (2027-28).
UKHospitality Cymru claims the move will increase the sector’s business rates bill by 23% to £19.6m (US$26.2m) in 2026/27. This will be followed by a 51% increase to £43.3m (US$57.8m) in 2027/28, and an 80% increase to £67.7m (US$90.4m) in 2028/29.
It says rateable values have increased by 26%.
David Chapman, executive director of UKHospitality Cymru, said: “These staggering increases are the direct result of the Welsh government stripping out any meaningful business rates support from hospitality businesses.
“An extra £131m in costs for the sector is simply too much to bear and it will sadly result in business closures and job losses, hitting Welsh high streets and communities.
“That will be the consequence of the Welsh government’s failing to support hospitality.
“Our local pubs, restaurants, hotels and cafés have been penalised for far too long by a broken business rates system that hits bricks-and-mortar businesses harder than anyone else. The decision by the Welsh government to overlook hospitality from its reforms is deeply damaging and will be devastating for Wales.
“We need help quickly and the Welsh government needs to urgently act. It must overhaul its business rates reform to include hospitality to avoid the disastrous consequences these significant extra costs will have on Welsh hospitality.”
At last year’s Night Time Economy Summit, industry leaders discussed the challenges faced by the on-trade in the devolved nations.
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