Hospitality sector will see business rates bills rise by £318 million over three years

Hospitality leaders say the Budget has failed to deliver real business rates reform, leaving pubs and hotels facing steep increases in their rateable values—some of which could rise fivefold by 2029. They warn this will accelerate closures and push more venues into distress, undermining communities and local economies

The analysis from UKHospitality reveals that small hospitality venues will see business rates bills rise by £318 million over three years, which is more than half the £634 million annual spend on Small Business Saturday. The figures reveal the extent to which the Government’s business rates reforms have unravelled in the week after the Budget.

In a letter to all MPs this week, UKHospitality said ‘this outcome is totally contrary to the Government’s manifesto commitment’ to level the playing field between the high street and online giants.

It corrects claims from Government ministers, who have repeatedly referenced the Budget delivering reduced taxes for hospitality businesses – which is the opposite of the reality facing the sector.

Even with the reduced multiplier, business rates will increase by 76% for the average pub and 115% for the average hotel over three years. This falls dramatically to just 16% for distribution warehouses, used by online giants, and 4% for large supermarkets.

Allen Simpson, Chief Executive of UKHospitality, said “On the day that we celebrate and support small businesses, the Government’s business rates policy is doing the opposite.

“Hospitality and the high street is being taxed out and all too often the most vulnerable businesses are small businesses. There’s no doubt that we will see business closures, job losses and price increases all accelerate as a result of these changes.

“Every single high street is going to feel a massive hit, and so will our communities when much-loved venues are forced to close as a result of this policy. The Government has the power to fix this, and we have presented clear solutions that will allow them to do so.

“I hope they recognise the very real threat these increases present to our high streets and act urgently.”

In his letter to all MPs, Simpson wrote:

Many Members of Parliament have raised concerns that they believed from the Budget speech that business rates bills for hospitality businesses in England were falling to support the high street, and that the move would be paid for by higher taxes on the online giants.

I am clear that MPs’ concerns are correct – far from a tax cut on hospitality, this is an unprecedented tax rise which disproportionately harms hospitality and protects the online giants and supermarkets. Without intervention, we face business closures, reduced investment and a contraction in youth employment. This outcome is totally contrary to the Government’s manifesto commitment to “level the playing field between the high street and online giants.

This scale of increase will force venues to cut jobs, raise prices, and in many cases close entirely. The impact on youth employment, already fragile, will be severe.