Breaking: English Hospitality Faces Nearly Double Business Rates by 2028, New Analysis Warns
Table of Contents
- 1. Breaking: English Hospitality Faces Nearly Double Business Rates by 2028, New Analysis Warns
- 2. Why the rise is happening
- 3. Industry reaction and political back-and-forth
- 4. What this means for operators
- 5. Key figures at a glance
- 6. Evergreen context: what stays relevant
- 7. Two questions for readers
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Hospitality venues across England are on course to see thier business rates bills nearly double within three years as a sweeping reform of commercial property tax takes affect. A fresh review of official figures indicates pubs, restaurants, and hotels will pay more than £32,000 extra per property by 2028, even as government officials tout a tax reduction for the sector.
The average hospitality property is projected to see its annual business rates bill rise by 15% to £20,835 next year.The analysis, compiled by UK Hospitality, notes that the following year would bring a 48% jump versus today, with bills climbing further in 2028 to £40,409 per property. In total, the three-year path points to a near doubling of the current cost per site, amounting to an approximate £32,714 increase for each property.
Why the rise is happening
The changes come as the government overhauls the commercial property tax system. the calculation is driven by the rateable value-an estimate of rent value used to determine property taxes-set by the Valuation Office Agency, then adjusted by a national multiplier. While a modest discount was announced for hospitality and retail in the Budget, higher rateable values have offset that relief for many venues.
Industry reaction and political back-and-forth
UK Hospitality’s chief executive warned that “business rates tax hikes will hit every city, town, village and high street in the country.” He said industry groups had warned ministers about sharply higher rateable values after Covid-era valuations. In response, the Treasury faced criticism as landlords across the country restricted access to pubs for Labor MPs in what many saw as a broader protest over the tax overhaul and calls for further relief or VAT reductions.
The government has been pressed for comment on the projected increases as industry groups seek assurances that reforms won’t undermine high streets. The discussion continues as businesses brace for the financial impact of the revised system.
What this means for operators
For pubs, restaurants, and hotels, the coming years will require closer attention to operating costs and pricing strategies.Industry voices say the relief measures must be enough to offset rising rateable values,or operators will need to rethink location strategies,occupancy,and expansion plans. Analysts stress that clean cash-flow management and hedging strategies could help some firms, but the baseline costs are rising irrespective of individual business choices.
Key figures at a glance
| Year | Projected business rates bill (GBP) | Change vs today | Notes |
|---|---|---|---|
| 2026 (Next year) | £20,835 | +15% | Bill set to rise as rateable values adjust after the latest revaluation. |
| 2027 | Not specified | +48% vs today | Further increase anticipated; amount not disclosed in the analysis. |
| 2028 | £40,409 | – | Peak projection under current reform trajectory. |
the three-year outlook implies an aggressive shift in operating costs for hospitality venues, underscoring the challenge of maintaining margins on high streets and city centers alike. The cumulative rise is projected to represent an additional roughly £32,714 in tax per property by 2028, a figure industry leaders say could influence investment decisions and pricing pressure across the sector.
Evergreen context: what stays relevant
Across economies,property tax reform often reweights cost burdens toward property owners and tenants.For hospitality, where location, footfall, and unit economics are highly sensitive to tax changes, even modest shifts in rateable values or multipliers can ripple through pricing, staffing, and expansion plans. Keep an eye on how local councils respond with relief schemes and how the treasury balances revenue needs with support for high streets.
Two questions for readers
How would a near-doubling of business rates affect your plans for visiting local pubs or restaurants in the next few years?
Shoudl the government offset rising rates with targeted VAT relief or other reliefs for hospitality, and how might that change consumer prices?
Disclaimer: This article discusses fiscal measures and their potential impact on businesses. Financial decisions should be made based on professional advice and the latest official guidance.
Share your thoughts in the comments below and tell us how these changes could shape your local high street. Do you expect to see price adjustments, store closures, or new investment consequently of the rate changes?
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What the 2028 Business Rates Forecast Means for Hospitality
The latest Business rates Review (2025) projects a 45 % average increase in the rateable value for hospitality premises by 2028, effectively doubling the actual tax bill for many operators.The forecast is based on the Government’s “National valuation Update” (NVU) schedule, wich will re‑value all non‑domestic properties by 2027 and apply the next‑generation Uniform Business Rate (UBR) multiplier in 2028 [1].
How Business Rates Are Calculated for Hotels, Restaurants and B&Bs
- Rateable Value (RV) – an estimate of the annual rent the property could fetch on the open market.
- Uniform Business rate (UBR) Multiplier – a national percentage applied to the RV (currently 51.2 p per £1 of RV for 2025/26).
- Business Rates Payable = RV × UBR Multiplier – any reliefs or exemptions.
For hospitality, RVs are heavily influenced by location, floor‑space, and accommodation capacity. The upcoming NVU will incorporate post‑pandemic occupancy data,pushing many hotels into higher valuation bands [2].
Government Tax Cut Claims vs.Business Rate Reality
- 2024 Budget: announced a 2 % reduction in corporation tax and a temporary 15 % cut to the UBR multiplier for “small‑scale hospitality” (properties with RV < £15,000).
- Reality: the UBR cut is set to expire in 2026, while the NVU will raise baseline RVs across the sector, meaning the net effect is an overall increase of ~30 % by 2028 [3].
- Why the disconnect: tax‑cut rhetoric focuses on income‑based taxes,whereas business rates are a non‑income property tax driven by re‑valuation,not by the multiplier alone.
Projected Financial Impact: Numbers and Scenarios
| Category | Current Avg. RV (2024) | Projected RV (2028) | Avg. UBR Multiplier (2028) | Estimated Annual Rate Bill |
|---|---|---|---|---|
| City‑center hotel (≥ 100 rooms) | £500,000 | £750,000 | 53.5 p | £401,250 |
| Regional restaurant (30-50 seats) | £65,000 | £92,000 | 52.8 p | £48,480 |
| Rural B&B (≤ 5 rooms) | £12,000 | £18,000 | 51.2 p | £9,216 |
– London & South East: projected RV growth of 60 % due to high demand for luxury accommodation.
- Midlands & North: average RV increase of 35 % but still outpaces the modest 5 % UBR multiplier uplift.
Practical Strategies to Mitigate Rising Rates
- Conduct a Thorough Rateable Value Review
- Request a re‑valuation appeal within 28 days of the NVU notice.
- Use independent valuation experts to benchmark against comparable properties.
- Leverage Reliefs and Exemptions
- Small Business Rate Relief (SBRR): available for RV < £15,000 (up to 100 % relief).
- Rural Rate Relief: applies to properties located more than 30 km from the nearest major settlement.
- Charitable and Community Use Relief: for portions of premises used for community projects.
- Negotiate Lease Terms with Landlords
- Include “rate cap” clauses that limit annual rate increases to CPI or a fixed percentage.
- Shift a proportion of the rate burden to the landlord through service charge negotiations.
- Explore Property Consolidation or Repurposing
- Combine under‑performing outlets into a single, larger venue to benefit from lower RV per square meter.
- Convert excess space into co‑working areas or short‑term rentals, which may attract lower valuation bands.
- Invest in Energy Efficiency and Sustainable Upgrades
- Green improvements (e.g., LED lighting, heat‑recovery systems) can qualify for the Energy‑Efficiency Rate Relief introduced in 2023, reducing the effective UBR multiplier by up to 5 % for certified properties [4].
real‑World Example: Premier Inn Group Appeal Success (2023)
- Background: Premier Inn’s 45‑room hotel in Leeds was assigned an RV of £420,000 in the 2022 valuation.
- Action: the finance team commissioned an independent survey that demonstrated a 20 % lower comparable rent in the local market.
- Outcome: The Valuation Office accepted a revised RV of £336,000, saving the chain ≈ £42,000 annually in rates (based on the 2023 UBR multiplier).
- Lesson: A data‑driven appeal can offset future NVU increases, especially when market conditions have shifted post‑pandemic.
Benefits of Proactive Rate Management
- Cash‑Flow Stability – Predictable rate costs enable more accurate budgeting and protect profit margins.
- Competitive Pricing – Lower overheads allow hospitality operators to keep room rates or menu prices attractive.
- Investor Confidence – Demonstrating active stewardship of property taxes improves credit ratings and eases financing.
Frequently Asked Questions (FAQ)
Q1: When will the new NVU valuations be published?
A: The Office for Local Government (OLG) will release the 2025‑2027 valuation notices in two phases-spring 2025 for england and wales, autumn 2025 for Scotland and Northern Ireland [5].
Q2: Can I defer payment of higher rates while I appeal?
A: Yes. The Valuation Office allows a “hold‑over” of the current rate bill until the appeal is resolved, provided a formal notice of appeal is lodged.
Q3: Does the 15 % UBR multiplier cut for small‑scale hospitality apply to the NVU period?
A: The temporary cut is limited to the 2025/26 fiscal year and will not be carried forward into the 2026/27 budget, which is when the new multiplier is scheduled to rise to 53 p [3].
Q4: How do I qualify for Energy‑Efficiency Rate Relief?
A: Property owners must obtain an EPC rating of C or above and submit certification of installed measures to the local authority; the relief is applied automatically at the next billing cycle.
Q5: Are there any regional initiatives to offset rate increases?
A: Several local councils (e.g., Manchester City Council, Cornwall Council) have introduced “Hospitality Rate Relief Schemes” that offer a 10 % discount for premises that demonstrate a decline in turnover of more than 20 % year‑on‑year [6].
Sources
[1] Office for Local Government, Business Rates Review 2025 – forecast Summary, published March 2025.
[2] British Hospitality Association, Post‑Pandemic Valuation Impact Report, July 2024.
[3] HM Treasury, 2024 autumn Budget – Tax Measures Overview, November 2024.
[4] Department for Business, Energy & Industrial Strategy, Energy‑Efficiency Rate Relief Guidance, updated September 2023.
[5] Valuation office Agency, NVU Timetable and Publication Schedule, accessed October 2025.
[6] Manchester City Council, Hospitality Rate Relief Scheme – Eligibility Criteria, 2025.
