Hospitality sector faces £33,000 rise in business rates over three years, analysis shows

Hospitality firms in the United Kingdom are facing a substantial rise in business rates over the next three financial years, according to analysis by UK Hospitality. The industry body said the average annual rates bill for pubs, restaurants and hotels would climb from £20,835 in the current year to £23,961 in 2026–27, and then to £40,409 by 2028–29. Over the three-year period, the typical hospitality business would be paying about £32,714 more than under current levels.

Allen Simpson, chief executive of UK Hospitality, said the bills will be 'simply unsustainable' for many businesses.

The Chancellor said at the Budget she would introduce 'permanently lower tax rates for more than 750,000 retail, hospitality and leisure properties.' But UK Hospitality notes that the effect depends on a complex formula used to calculate rates bills, and that many firms could end up paying more despite the pledge.

The analysis highlights that the shift comes as the government seeks to rebalance the tax system around property values rather than a simple, uniform cut. It underscores the difficulty of delivering relief to a sector that faces variances in local business rates due to property size, location and other factors, even as policymakers emphasize a broader aim of lowering the tax burden for hundreds of thousands of retail, hospitality and leisure properties.

Industry observers say the numbers reflect the challenge of reforming business rates without creating uneven outcomes among pubs, restaurants and hotels of different vintages and scales. UK Hospitality said it will press for clarity and adjustments as the reforms are implemented, noting that the sector must be able to plan and invest with predictable costs.