The Treasury has commissioned an independent review of how pubs and hotels are valued for business rates in England and Wales, with a call for evidence opening on Monday.
The review will be led by Jerry Schurder, a business rates specialist, and will report to the Treasury by the end of March 2027. Any changes that follow would take effect at the next revaluation in 2029.
Ministers said the call for evidence would ensure landlords, brewers, hoteliers and business owners were properly represented in the process. The Treasury acknowledged that operators are concerned the current system does not reflect the realities of the pub and hotel market.
Crucially, the valuations that took effect this April will not be revisited. Businesses facing higher bills under the 2026 rating list will continue to pay them while the review runs.
Pubs and hotels are not valued on floor space in the way shops are. Under the receipts and expenditure method, the Valuation Office Agency estimates a property's "fair maintainable trade" — the annual turnover, excluding VAT, that a reasonably efficient operator might be expected to achieve — and applies a percentage based on operating style, costs and profitability. Trade bodies argue the approach captures rising revenue but not the rising cost of generating it.
That objection has been building for months. The Treasury's Transforming Business Rates interim report, published in September 2025, listed ratepayer concerns over the receipts and expenditure methodology as a priority to address before 2029, and a subsequent call for evidence on business rates and investment closed in February.
Schurder has more than 40 years in rating and valuation, has served as president of the Rating Surveyors' Association and previously gave evidence to the Treasury Committee's business rates inquiry as business rates policy lead at property advisers Gerald Eve, the UK arm of Newmark.
Hotels have pressed hardest for change, having been left out of recent relief measures. Research by Colliers put the increase in hotel rateable values at the 2026 revaluation at around 76% nationally, with some individual properties rising by more than 250%. UKHospitality has estimated an average pub will pay £12,900 more over three years, and an average hotel £205,200.
"The current valuation methodology creates a significant burden for hotels," said Neal Jones, president of Marriott in Europe, the Middle East and Africa.
Allen Simpson, of UKHospitality, said business rates remained "a significant burden for hospitality businesses, and the system needs to better reflect the trading realities".
The review follows two rounds of relief. In January, the Treasury announced a 15% cut to new pub bills from April 2026 alongside a two-year real-terms freeze, worth an average £1,650 per pub, and promised a review of valuations. That relief applies to pubs and live music venues in England; restaurants, cafés, nightclubs, hotels and guesthouses are excluded.
In July, Prime Minister Andy Burnham said business rates for pubs, clubs and live music venues would be cut by 20% from April 2027, a measure the government said would save a typical pub about £1,100, benefit nearly 32,000 venues and cost £100m a year.
Trade figures remain stark. The British Beer and Pub Association recorded 161 pub closures across Britain in the first quarter of this year, equating to around 2,400 job losses and a 26% increase on the same period in 2025, following 336 closures last year.
Reaction to the review has divided along familiar lines. Shadow Chancellor Mel Stride, quoted by the BBC, called it "far too late for a sector this Labour government has already done its best to kill off". The Liberal Democrats' Daisy Cooper said reform was "long overdue" but called for an emergency VAT cut. The Federation of Small Businesses said Schurder brought "crucial heavyweight business rates expertise into the Treasury", while the British Retail Consortium warned it was "vitally important that the needs of retailers are not overlooked".
The Treasury has not said whether hotels will receive interim support before 2029.
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