Business Rates Reform: What Pub Operators Need to Know Right Now

The UK Government has launched a major Call for Evidence on business rates reform, and it could have serious implications for pub operators across England.
The consultation — open until 18 February 2026 — focuses on how the business rates system can better support investment, growth,
and the long‑term viability of sectors like hospitality.

Why This Matters to Pubs

Business rates are one of the largest fixed costs pubs face. Unlike many other industries, pubs rely heavily on physical space, in‑person trade,
and long‑term investment into buildings, kitchens, garden areas, and interiors.

When rates rise suddenly — often following improvements or revaluations — this can make operators delay investment, put expansion plans on hold,
or in some cases threaten commercial viability. The government has recognised that the current system creates barriers to investment,
and this review could shape the future landscape for the entire pub sector.

Key Issues Being Reviewed

1. Moving from “Slab” to “Slice” Taxation

Currently, if improvements push a pub’s Rateable Value over a threshold, the entire value is taxed at the higher rate.
A “slice” system — similar to income tax bands — would only tax the portion above each threshold.
This would reduce the financial shock when operators invest in their buildings.

2. Reforming Small Business Rates Relief (SBRR)

The current SBRR rules create a harsh “cliff‑edge” where even opening a second small site can cause an operator to lose all relief overnight.
The government wants evidence of how this prevents small pub businesses from growing.

3. Improving Improvement Relief

Improvement Relief currently gives 12 months of protection from increased rates following qualifying refurbishment work.
But pub refurbishment cycles are normally 3–5 years. This consultation seeks views on extending or reshaping this relief.

4. Empty Property Relief (Landlord‑Focused)

Property owners — including brewery and pub‑company landlords — argue that current rules don’t fit with real refit and downtime patterns,
especially during long void periods. Reform is expected here too.

5. Receipts & Expenditure (R&E) Valuations

For pubs valued on R&E, valuations can be unpredictable, making it hard to plan long‑term investment.
This consultation specifically asks for experiences and suggestions to improve transparency and predictability.

What Pub Operators Should Do Now

This is a rare opportunity to influence how business rates evolve over the coming years.
Operators should consider submitting evidence if:

• You’ve delayed improvements because of business rates increases
• You were hit unexpectedly hard by a revaluation
• SBRR rules discouraged you from expanding
• Your R&E valuation felt unpredictable or unclear
• Business rates have shaped major investment decisions

The hospitality sector has a powerful story to tell — and needs to be heard clearly.

Submit Your Views

Visit the Official Govt website HERE