Treasury Launches Independent Review of Pub and Hotel Business Rates Valuations

The government has launched an independent review into how pubs and hotels are valued for business rates, announcing on 24 August 2026 that leading business rates expert Jerry Schurder will lead the inquiry. Schurder is expected to report back to Treasury by the end of March 2027, giving enough time for his recommendations to feed into the next revaluation scheduled for 2029.

The review follows a significant increase in rateable values for pubs and hotels at the 2026 revaluation. Both sectors saw bills rise substantially after pandemic era valuations, which had held rateable values artificially low, were wound down. The concern among industry bodies is that the current valuation methodology does not accurately reflect how pubs and hotels actually generate income, a point the government has now acknowledged formally by commissioning an independent look at the system.

Why Pubs and Hotels Were Hit Harder at the 2026 Revaluation

Business rates in England are based on a property's rateable value, which is set by the Valuation Office Agency and is meant to reflect open market rental value on a specific reference date. During the pandemic, many pubs and hotels saw their assessed values frozen or reduced to reflect the collapse in trade. As those temporary arrangements unwound and a new revaluation cycle arrived in 2026, rateable values for both sectors moved sharply upward.

Industry bodies have argued for years that the standard valuation approach does not sit well with how hospitality businesses work. A pub's profitability depends on footfall, licensing conditions, tied supply arrangements, and community use in ways that a straightforward rental comparison cannot easily capture. The British Beer and Pub Association has described the current system as imposing a "disproportionately higher business rates bill" on the sector for years. The government's decision to commission an independent review is a formal concession that those concerns have merit.

What the Review Will Examine

Schurder's task is to assess whether current valuation methodologies for pubs and hotels are operating fairly in practice and whether they remain fit for purpose. He will engage with landlords, brewers, hoteliers, and valuation professionals through the Call for Evidence, which closes on 16 October 2026. Responses should be submitted to PubsHotels.Valuation@hmtreasury.gov.uk.

One point the Treasury has been clear on is that the 2026 valuations are not being reopened. Businesses that have already received their revised rateable values for this cycle should not expect them to change as a result of this review. The inquiry is focused on ensuring the methodology used at the 2029 revaluation is fairer and more transparent, not on unwinding decisions that have already been made.

Financial Secretary to the Treasury, James Murray MP, framed the move as part of a broader commitment to supporting high street businesses. "Last month we announced tax cuts for pubs to give them the breathing room they need. Today we're going further with a rethink of valuations, so that we can build a fairer system for the future," he said.

The Business Rates Cuts Already in Place

The review sits alongside a series of rates relief measures the government has introduced over the past year. From April 2026, bills for pubs and live music venues were cut by 15%, followed by a commitment to a two year real terms freeze. The government says that saved the average pub an additional £1,650 in 2026/27, with around 75% of pubs seeing their bills fall or remain flat over the year.

Last month, a further 20% cut was confirmed for pubs, social clubs, and live music venues from April 2027. That reduction will be fully funded, partly through reviewing reliefs currently available to businesses the government has identified as not contributing positively to local communities, vape shops were cited explicitly in the announcement. Hotels are not included in that particular cut, which is why the broader valuation review announced today carries more weight for the accommodation sector.

UKHospitality chief executive Allen Simpson welcomed the review but was measured in his response, noting that "business rates remain a significant burden for hospitality businesses and the system needs to better reflect the trading realities for the sector." Greene King chief executive Nick Mackenzie was more pointed, saying the current system "has barely changed in three decades and overlooks how markets and customer habits have altered since the 1990s."

For now, the review is at its starting line. Schurder will gather evidence through the autumn and report early next year. Whether his recommendations translate into a meaningfully different approach at 2029 depends on what the evidence shows and how far the government is prepared to reform a system that has faced sustained industry criticism for a long time.