Rising Costs Despite Government Pledges
A pub owner in the south east of England says his business will face an additional £62,000 per year in costs following changes to business rates announced in the Budget. Phil Thorley, who runs the Thorley Taverns pub group, said rates will rise for 17 of his 18 sites despite Chancellor Rachel Reeves’s pledge to lower taxes for retail, leisure, and hospitality firms by increasing the levy on higher-value properties such as warehouses used by online retailers.
The government said most “typical independent pubs” will save £4,800 per year under the measures. Business rates are calculated using a property’s rateable value, which reflects estimated annual rent. The change introduced lower multipliers for 750,000 High Street firms, though the reduction was less generous than expected.
Higher Rateable Values and Loss of Discounts
Many businesses have also seen their rateable value increase and face the end of the Covid-era 40% discount from April. Transitional relief limits annual increases, with caps set at 15% for 2026–27, 25% for 2027–28, and 40% for 2028–29, plus inflation. UK Hospitality estimates the average pub will pay £12,900 more over those three years, while an average hotel will pay £205,200 more.
Thorley said the rateable value at most of his sites has risen, adding: “A further £62,000 worth of costs onto the business, which is absolutely at its knees at the moment.” He described the impact of the chancellor’s October Budget, which increased hiring costs through rises in employer national insurance contributions and the minimum wage. Thorley said another wage increase will result in fewer jobs, less investment, and less training, warning that the changes could “be the death knell to the British pub.”
Industry Reactions and Concerns About Viability
The government said it is supporting pubs, restaurants, and cafes with a £4.3bn package that limits business rates bills. A Treasury spokesperson said the support adds to cuts in licensing costs for pavement drinking, the freeze on draught beer duty, and the cap on corporation tax.
Manchester pub owner Elaine Wrigley said the latest Budget amounted to “smoke and mirrors.” She told the BBC that her bar’s rateable value rose from £69,000 in 2023 to £97,000 and that she is still facing a 15% increase even with the new multipliers. She said her business has raised prices four times in the past year but feels unable to push them higher, which is squeezing margins.
Sacha Lord, chairman of the Night Time Industries Association, said the changes amount to a “stealth tax” on High Street venues. He said operators initially welcomed the Budget, but the full impact of revaluations became clear within hours. Lord warned that once the changes take effect in April, closures could exceed those seen during the pandemic.
Political Criticism and Calls for Further Support
The Conservatives called the changes “a bombshell,” saying many pubs, restaurants, and shops will see bills rise significantly. Shadow business secretary Andrew Griffith said the government had considered a larger discount but “bottled it,” predicting more closures, fewer jobs, and lower growth unless Reeves revises the plan. He said businesses need clarity before bills are issued in April.
The Liberal Democrats urged Reeves to offer “a lifeline” to the hospitality sector. Treasury spokesperson Daisy Cooper said pubs, cafes, and restaurants are already struggling and that the changes will force more High Street closures. She called for a cut to VAT for the sector.
Featured image credits: Flickr
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