Independent review to overhaul business rate valuations for hospitality sector

The UK government has announced an independent review designed to make business rate valuations fairer for pubs and hotels in England and Wales. The initiative responds to mounting pressure on the hospitality sector, which has faced significant financial strain following the expiration of pandemic-era relief measures and the implementation of new revaluations this year.

Led by Jerry Schurder, an independent business rates specialist, the review is scheduled to report its findings to the Treasury by the end of March 2027. The primary objective is to assess the valuation methodology for hospitality venues before the next statutory revaluation date in 2029. It is noted that the review will not alter the rise in valuations currently taking effect, leaving immediate pressures on the sector largely unchanged in the short term.

James Murray, the financial secretary to the Treasury, framed the move as a necessary structural adjustment. He stated that pubs and hotels are vital for communities and economic growth, adding that a rethink of valuations would help build a fairer system for the future. This announcement follows a decision by Andy Burnham last month to cut business rates for pubs, social clubs, and live music venues in England by 20 per cent from April next year.

Trade bodies have largely welcomed the scrutiny of the valuation methodology. Allen Simpson, chief executive of UKHospitality, described the government’s attention to the issue as positive, arguing that the system needs to better reflect the trading realities of the sector. Emma McClarkin, chief executive of the British Beer & Pub Association, called the review sorely needed, noting that pubs have for years paid a disproportionately higher business rates bill which has eroded their ability to remain open.

The broader context for the review includes estimates that two pubs are closing a day across Britain this year, driven by higher taxes, wages, energy, and food costs. While the current focus is on hospitality, the government faces additional calls to extend similar relief to other community businesses. This month, 234 independent booksellers signed an open letter urging the prime minister to consider extending business rates relief to bookshops.

Further reforms are anticipated at John Healey’s first budget on 28 October, where the government has suggested it will address business rates, including small business rates relief. The upcoming budget is expected to provide additional clarity on the fiscal support available to the sector as the independent review progresses.