Government Urged To Go Deeper On Business Tax Cuts To Save Hospitality

UK pub groups and hotel associations are warning the government that many venues will be forced to close unless it offers immediate financial support as pandemic-era support ends and a property revaluation are set to push up business costs.

At the same time Labour MPs are calling on Prime Minister Sir Keir Starmer to reconsider the proposed changes to business rates, with some telling the BBC they are hopeful further relief will come.

Industry leaders have called for additional tax relief in a meeting this week with Treasury minister Dan Tomlinson to offset the impact of measures announced in the November budget, reports Bloomberg.

Pub bosses argue that Sir Starmer’s suggestion of easing planning and licensing rules, while welcome in the long term, will not compensate for the sharp rise in business rates and other operating costs hitting the sector in early 2026, according to a report in The Financial Times. 

To that end, industry groups are calling for targeted measures such as extended business rates relief, time‑limited tax breaks, or direct support to bridge what they describe as a critical period for hospitality cash flow. 

They emphasise that pubs, especially independents and those in weaker high streets, are squeezed by higher wages, energy bills and supplier costs at the same time as consumers remain cautious on discretionary spending. 

The British Beer and Pub Association head Emma McClarkin, who has reportedly requested a pub‑focused reduction in business rates, was quoted by Bloomberg as saying: “We are hopeful the government understand the need for a fast and meaningful solution to secure the future of our pubs”.

Bills Are Going Up

Earlier this week the Prime Minister conceded that the higher rateable values for properties means pubs and others would “struggle”, explaining to LBC that “because of revaluation, that means that some will have their bills going up”.

Sir Starmer said the government is putting in place transitional relief, and discussions with the sector on further support would take place.

UKHospitality estimates that business rates will increase by 76% for the average pub, and by 115% for the average hotel over the next three years. 

According to the trade body, small hospitality venues will see business rates bills rise by £318m over three years.

Pub companies see themselves as important community and employment hubs, and, as such, warn that a wave of closures would undermine Labour’s wider levelling‑up and high‑street revival ambitions. 

England and Wales saw an average of one pub close permanently every single day in 2025 as the industry grapples with mounting costs.

Sector Speaks Out

Celebrity chef Tom Kerridge this week highlighted the stark financial struggles faced by the UK hospitality sector, explaining that his own pubs and restaurants face a business rates increase in excess of 100 per cent.

As anger and frustration grows among pub landlords, Labour MPs have been barred from hundreds of pubs UK-wide.

Next, pubs are reportedly planning to launch industrial action later this month, with plans to march on Westminster in protest of the planned rise in business rates.