English pub operators say reported business rates relief is too narrow

Pub operators in England are questioning how much help they would actually get if the government raises the threshold for paying business rates, a change that has been widely reported ahead of Chancellor John Healey’s Budget on October 28.

Under the reported plan, the rateable value at which businesses begin paying business rates would rise from £12,000 to £18,000. If adopted, the change could take about 75,000 properties out of the tax entirely, including roughly 2,600 pubs, 2,500 restaurants and 1,600 cafés in England.

For many operators, however, the main issue is not whether the measure would help at the smallest end of the market, but whether it would do enough for the wider hospitality industry, where many pubs already sit well above the proposed threshold and face pressure from several other taxes and rising operating costs.

Tim Bird of Cheshire Cat Pubs and Bars said the reported move would make no difference to any of his venues because it mainly benefits very small businesses. He argued that the current system needs broader reform, especially in the way pub rates are calculated, rather than a limited change at the bottom of the scale.

London multi-site operator Paul McAstocker took a similar view. He said any business rates support would be welcome, but added that many pubs already have rateable values far above the proposed cutoff. In his view, operators need more substantial help than a threshold increase that would reach only a narrow part of the sector.

Ayesha Kalaji, chef-owner of Queen of Cups and winner of the Estrella Damm Top 50 Gastropubs Chef of the Year award, said she did not believe the reported measure would address what she sees as hospitality’s biggest tax problem. She said the industry has repeatedly argued that VAT is the main burden and warned that a business rates change of this kind would have little effect on the survival of many venues.

The concern from operators is that any relief on one line of the balance sheet could be outweighed by pressure elsewhere. JD Wetherspoon founder and chairman Tim Martin said it would be a mistake to judge any one Budget measure on its own. He said pubs and trade groups should look at the total cost base facing the industry, including excise duty, employment costs, business rates, sugar taxes and fruit machine duty, rather than focusing on a single announcement.

That broader concern matters beyond pub owners. Pubs remain a major route to market for beer, wine and spirits, and changes in tax policy that affect their financial stability can also shape sales volumes for brewers, winemakers, distillers and distributors. Relief that helps only a limited number of smaller sites may therefore have a narrower effect on the drinks trade than the headline figures suggest.

The reports emerged days after Healey met hospitality and business leaders, including UKHospitality, before next week’s Budget. Those talks centered on rising costs and on what the government could do to support investment and growth. Healey has also said the government wants to give businesses “a bit of breathing space” in the Budget, a phrase that has been closely watched across the sector as companies press for more meaningful tax reform.

So far, the Treasury has not confirmed the reported business rates change. Asked directly about the proposal, the department declined to comment on the details. A Treasury spokesperson said decisions on tax would be set out by the chancellor at fiscal events and that the government does not routinely comment on rumor, speculation or proposed measures in advance.

The spokesperson added that Healey remains focused on giving families and businesses “a bit of breathing space,” while supporting British jobs, driving growth and staying within the government’s fiscal rules. The Department for Business and Trade referred questions on the reported business rates changes back to the Treasury.

Business rates have long been a point of tension for the pub and restaurant trade, particularly for operators with physical sites in town and city locations who say the system does not reflect current trading conditions. Industry groups have argued for years that the tax structure puts hospitality businesses at a disadvantage because it is tied to property occupation at a time when margins are under pressure from wages, energy, food costs and borrowing costs.

The reported threshold increase would still be meaningful for some independent sites at the lower end of the market, especially smaller rural pubs or neighborhood venues with lower rateable values. For those businesses, being taken out of business rates altogether could provide direct savings at a time when cash flow remains tight. But comments from operators suggest that many mid-sized and larger pub businesses do not expect to feel much benefit unless the Budget includes broader action.

That leaves the sector waiting for next week’s fiscal statement to see whether the reported relief appears in final form and whether it is matched by wider changes. For now, the message from many operators is that while any support is welcome, the scale of the industry’s cost pressures means a targeted business rates adjustment alone is unlikely to shift sentiment across much of the pub trade.