Pubs and hotels could see business rates reformed after review

Pubs and hotels could see business rates reformed after review A reappraisal of how business rates are calculated for pubs and hotels in England and Wales is being launched, with the possibility of improving the current system. The Treasury has appointed Jerry Schurder, a former business rates policy lead at Newmark UK, to head the review into rate valuations. Schurder is expected to report back in March 2027, and his findings will feed into the next rates revaluation scheduled for 2029. The government is inviting landlords, hoteliers and other business owners to submit their views to inform the process. Last month, Andy Burnham announced a 20 % reduction in business rates for pubs, social clubs and live music venues across England, set to take effect in April. Pub groups have long argued that they face disproportionately high rates bills, while other sectors have called for a broader overhaul of the rates framework. According to the British Beer and Pub Association (BBPA), 161 pubs closed in the first three months of this year across England, Scotland and Wales, representing roughly 2 400 lost jobs. Rising business rates are cited as a key challenge for the hospitality sector, although increases in National Insurance and the minimum wage have also been blamed for raising staff costs. James Murray, fiscal head to the Treasury, said the review would examine “a rethink of valuations - so that we can build a fairer strategy for the future.” Emma McClarkin, chief executive of the BBPA, warned that “for years pubs have paid a disproportionately higher business rates bill which has crushed down their ability to keep the doors open, so this review is sorely needed and hugely welcome.” The BBPA explains that pubs are assessed for rates using Fair Maintainable Trade (FMT) rather than simple floor area. Under FMT, a rise in a pub’s turnover leads directly to a higher rates bill. Jonathan Lawson, chief executive of Butcombe Group—which operates 120 pubs across southern and south‑western England—told the BBC’s Today programme that this approach effectively “punishes success.” He contrasted pubs with large online retailers that operate from warehouses, noting that “their rates are calculated based on what is deemed to be the market rent for that area, and takes very little account in terms of revenue driven from that site.” Lawson added, “you can have a very large site paying a comparatively low level of business rates versus a comparatively small pub… paying a very high level of business rates.” Schurder’s review will cover both England and Wales, as the two nations share the same valuation methodology; Northern Ireland and Scotland maintain separate systems. Craig Beaumont of the Federation of Small Businesses welcomed Schurder’s appointment, saying he would bring “crucial heavyweight business rates expertise into the Treasury.” Beaumont, however, urged the government to address the wider rates system and expand relief thresholds for smaller firms. Tom Ironside of the British Retail Consortium also supported the review but stressed that it is “vitally important that the needs of retailers are not overlooked.” Shadow Chancellor Sir Mel Stride criticised the initiative, declaring it “far too high for a community this Labour authorities has already done its champion to termination off.” Liberal Democrat Treasury spokesperson Daisy Cooper described reform of business rates as “long overdue,” while calling for an emergency VAT cut and a reversal of recent jobs taxation changes, which she said “have hammered hospitality in particular.”