The Treasury has initiated an independent review of business rates for pubs and hotels, aiming to reform how valuations are calculated and to recommend changes to the existing system. Jerry Schurder, former business rates policy lead at Newmark UK, has been appointed to lead the review, which is expected to deliver its findings by the end of March 2027.

The government is also seeking input from landlords, brewers, hoteliers, and business owners through a call for evidence to inform the review. This development follows the announcement of a 20% reduction in business rates bills for pubs, social clubs, and live music venues, effective from April next year. While the reduction was generally welcomed by the sector, there were calls for a broader application to other businesses and for more extensive reforms to the overall business rates system.

Financial Secretary to the Treasury James Murray emphasized the importance of pubs and hotels, describing them as essential to community vitality and economic growth across the country. He noted that the recent tax relief provides temporary support, but the review aims to establish a fairer valuation system for the long term. Murray also indicated that the government plans to detail further reforms, including those affecting small business rates relief, in the upcoming Budget.

Industry leaders expressed support for the review, highlighting the challenges posed by the current business rates framework. Emma McClarkin, chief executive of the British Beer and Pub Association, said that pubs have long faced disproportionately high business rates which have impacted their viability, making the review a necessary step forward. Neal Jones, EMEA president at Marriott International, pointed to the burden created by the current valuation approach on hotels and endorsed the review’s goal of achieving a system that is fair, transparent, and aligned with present market conditions.

Allen Simpson, chief executive of UK Hospitality, echoed concerns that business rates remain a significant obstacle for hospitality businesses. He called for comprehensive reforms that reflect the sector’s trading realities to foster investment and growth. Meanwhile, Braden Saunders, a spokesperson for the UK Spirits Alliance and owner of Doghouse Distillery and Bar in Battersea, linked the business rates reduction with government excise duty policy. Saunders noted that the hospitality rate cut, costing £100 million, was roughly balanced by revenue losses from excise duty on spirits last year. He advocated for cutting excise duties on spirits to help fund the business rates relief, which he argued would be financially sustainable.

As the review progresses, the Treasury’s engagement with industry stakeholders aims to balance immediate relief with longer-term structural changes to the business rates system, particularly within the hospitality sector.