Calls Grow for Changes to Pub Business Rates Assessments
Industry bodies continue to highlight the financial pressures facing pubs, with recent reports raising concerns about business rates and the impact they could have on future investment across the sector.
Research commissioned by the British Beer and Pub Association (BBPA) suggests that around 2,300 pubs could close by the end of the decade if changes are not made to the way pubs are assessed for business rates.
The BBPA says that two pubs a day have already closed during 2026. While the organisation welcomed recent Government support, it continues to call for longer-term changes to the valuation methodology used for pubs.
Earlier this year, the Government introduced a 15% reduction in business rates for eligible hospitality businesses and announced a two-year freeze for pubs from 2027. Research commissioned by the BBPA estimates these measures could save the sector more than £340 million over the coming years, reducing the average pub's annual business rates bill by around £2,000.
Alongside these measures, the Treasury has confirmed that it is reviewing how pubs are assessed for business rates, with any changes expected to be introduced by 2029.
Pubs are valued differently from many other commercial properties – and that's at the centre of the current debate.
Most commercial properties are valued using rental evidence where suitable comparable rents exist. Pubs are commonly valued using the receipts and expenditure (R&E) method, which estimates a property's rental value by reference to its fair maintainable trade rather than relying solely on comparable rents.
The VOA's Rating Manual also requires valuers to consider factors including location, outdoor trading space, car parks, playgrounds, character properties and premium food offers when assessing a pub's fair maintainable trade and rateable value.
Industry bodies, including the BBPA and major operators such as Greene King, have called for this methodology to be reviewed, saying it can produce higher rateable values for some pub businesses than other valuation approaches. The Treasury's review will consider whether any changes to the methodology are required.
The conversation isn't limited to pubs. Similar concerns are also being raised elsewhere in the hospitality sector. A recent BBC report highlighted an independent hotel in Berkshire facing a potential £150,000 increase in its business rates bill over the next three years following changes to its rateable value. The hotel said the increase could affect future investment and staffing plans.
Business rates calculations are also becoming increasingly complex. From April 2026, England introduced five separate business rates multipliers, including reduced multipliers for qualifying retail, hospitality and leisure properties and a higher multiplier for the highest-value commercial properties. These sit alongside transitional relief schemes and other business rates reliefs, meaning the amount a business pays depends on far more than its rateable value alone.
As the business rates system becomes more complex for retail, hospitality and leisure businesses, a specialist review could uncover opportunities to reduce costs.
Understanding how a property has been assessed, checking that property details are accurate and reviewing whether all available reliefs have been applied can help identify opportunities to reduce business rates liability.
At Commercial Property Advisors (CPA), our surveyors specialise exclusively in business rates. Regulated by RICS, we help retail, hospitality and leisure businesses review their assessments, identify inaccuracies, review available reliefs and uncover opportunities to reduce their business rates liability.
Get started with a free, no-obligation business rates review
