What is happening to business rates on pubs?

Some pubs in England may have to pay significantly higher business rates from April 2026. This follows business rates revaluation and the removal of covid-era relief.

Business rates are a tax that is levied on non-domestic properties. Business rates in England are revalued every three years.

The government published details of new rateable values in November 2025, alongside the 2025 Budget. The new rateable values took effect on 1 April 2026 and will substantially change business rates bills for many businesses.

There were media reports from December 2025 onwards that pubs, in particular, will face higher business rate bills as a result of the revaluation. Subsequent reports emerged of publicans banning Labour MPs from their pubs in protest. The trade association UK Hospitality has said that “in 2027/28, an average pub’s rates will be £4,500 higher than today, and in 2028/29 £7,000 higher”.

In response, on 27 January 2026, the government announced an additional 15% relief for pubs, and live music venues, to be applied from 2026/27 after other transitional relief.

This Insight summarises the effects of the 2026 business rates revaluation on pubs. These effects have arisen from the interplay between the two components of a business rates bill: the rateable value and the multiplier (the tax rate).

In summary, some pubs are likely to have faced substantial increases in their rateable value in April 2026. At the same time, the government is setting lower multipliers, but for many properties the multiplier won’t decrease by enough to offset the rise in rateable value.

The effects of the revaluation are explained in more detail in the Commons Library briefing Business rates: the 2026 revaluation.

What are business rates and how do they work?

Business rates are a tax that is levied on non-domestic properties. They are revalued by the Valuation Office Agency (VOA) every three years.

The April 2026 revaluation sets properties’ rateable values for 2026 through to 2029.

A property’s basic business rates bill is based on multiplying its rateable value (normally based on how much it would cost to rent a property for a year) by the relevant multiplier (how much the rateable value is multiplied by).

How much will rateable values increase for pubs in 2026?

Statistics from the VOA show that rateable values in England for “Public Houses/Pub Restaurants” will go up by an average of 30% in 2026, and rateable values for “Public Houses/Pub Restaurants (Including Lodge)” will go up by an average of 70%.

This compares with an average of 19.4% across England for all properties.

Why have pubs been particularly affected by the rateable values increase?

The VOA calculates the rateable value of all properties by their annual rental value.

To calculate this for pubs, the VOA calculates the rateable value of pubs by their “fair maintainable turnover”. The percentages adopted derive from rental evidence. The VOA has published some additional details of how this is done.

The rateable value of a property is estimated as at a date two years before the revaluation takes effect (the “antecedent valuation date”), regardless of the method used to calculate the rateable value.

The VOA estimates a pub’s drinks sales, food sales, accommodation sales and other receipts. The VOA does not have to use a pub’s actual sales figures; instead, it is required to estimate the level of trade achievable by a “reasonably efficient operator”. A percentage is then applied to each of these totals.

The percentages that the VOA used at the last revaluation, which took effect in 2023, can be seen in the Valuation of public houses guide for 2023. A guide is published jointly by the VOA and representatives of the pub trade at each revaluation. Different percentages are used for different parts of England and Wales, and for different levels of trade.

What has the government done?

The property valuation process outlined above is conducted independently of the government. However, it is up to the government to decide on the other element of business rates bills: the multipliers.

There are currently two multipliers for business rates in England (‘standard’ and ‘small’). Retail, hospitality and leisure (RHL) properties in England – including pubs - currently receive a 40% discount on business rates. In the Autumn 2025 Budget, the government announced that the discount would be removed.

Instead, from 2026/27, there are five multipliers in England.

Two of the new multipliers are specifically for RHL properties. This category includes pubs. Pubs with a rateable value of under £51,000 will use a multiplier of 38.2p, and pubs with a rateable value of between £51,000 and £499,999 will use a multiplier of 43p. Any pubs with a rateable value above £500,000 will use a new, non-RHL-specific higher multiplier of 50.8p. These rates are set by regulations.

The business rates multipliers for 2026/27 are all lower than those for 2025/26. However, they are not 40% lower. For many pubs, and other properties, the decrease in the multipliers will be outweighed by the removal of the discount and the rise in rateable values.

Extra relief for pubs

Some reports in January 2026 suggested that the government was planning extra support for pubs facing large increases in their business rate bills. There were also reports of other sectors seeking additional support.

On 27 January 2026 the government announced an additional 15% relief for 2026/27 for all pubs and live music venues. The 15% relief will be applied after any transitional relief or Supporting Small Businesses relief (see below) is applied to a pub’s bill.

Pubs and live music venues will then have the rise in their bill capped according to inflation in 2027/28 and 2028/29. The government’s press release defines the coverage of the terms ‘pubs and live music venues’.

What other reliefs already exist in the system?

The government is running two relief schemes which cap the amount by which the business rates bill on a property can increase, year on year, after the 2026 revaluation. These are explained in detail in the Commons Library briefing Business rates: the 2026 revaluation.

One of these schemes is called ‘transitional relief’ (TR); the other is called ‘supporting small businesses’ (SSB). Pubs will all qualify for SSB and not for TR. Government guidance states that if a property qualifies for both schemes, it will be placed in SSB.

SSB sets percentage caps for the amount by which a property’s bill can rise in each of the three financial years between 2026 and 2029. The calculation of SSB uses a property’s business rates bill in 2025/26 as its ‘starting point’. If the property’s business rates bill in 2025/26 was reduced because of transitional relief arising from the last revaluation, that relief is disregarded (that is, the starting point would be higher than the actual bill that it paid in 2025/26).

SSB has a minimum cap of £800 a year. Thus, if the percentage calculations would limit the rise in a property’s business rates bill to, for instance, £450, a cap of £800 would apply instead.

The government has published some worked examples of the effects of SSB. See Budget 2025: Retail, Hospitality and Leisure Factsheet.