The pub and hotel business rates review launched by HM Treasury on 24 August 2026 is examining how these properties are valued for business rates in England and Wales. It is not an immediate reduction in bills, and it does not reopen every part of the business rates system. It is a focused review of whether the valuation methods used for pubs and hotels remain appropriate, consistent and transparent.
Operators, landlords, brewers, hotel owners, valuers and representative bodies can submit evidence until 11.59pm on 16 October 2026. The review is due to make recommendations by the end of March 2027. Any recommendations accepted by the government are intended to apply from the next revaluation, rather than changing the 2026 rating list retrospectively.
What Has The Government Announced?
The government has appointed business rates specialist Jerry Schurder to lead an independent examination of the valuation methodology for public houses and hotels. The accompanying call for evidence asks whether the current approaches reflect how the market operates, whether they are applied consistently and whether ratepayers receive enough information to understand their valuations.
The full HM Treasury call for evidence contains separate questions for pubs and hotels, worked examples and links to the relevant 2026 valuation schemes. Operators considering a response should read the official document rather than relying on headlines or social media summaries.
Why The Pub And Hotel Business Rates Review Is Happening
The 2026 business rates revaluation came into effect on 1 April 2026. Its valuation date was 1 April 2024, when trading conditions were very different from the pandemic-affected evidence used for the previous list. HM Treasury says there was significant movement in pub and hotel rateable values between the 2023 and 2026 revaluations.
Industry representatives have raised concerns about whether trading performance, rents, different business models and individual property circumstances are being reflected fairly. They have also questioned how easy it is for an operator to follow the evidence and assumptions behind a valuation.
The review therefore concentrates on methodology and its practical application. It is not tasked with deciding the overall amount of business rates that pubs and hotels should pay. That distinction matters because a review of how a rateable value is calculated is not the same as a new relief, discount or tax-rate announcement.
It is also not an application for Small Business Rate Relief and does not change who qualifies. Relief has separate rules and depends on the rateable value and circumstances of the business. Operators should check the current GOV.UK Small Business Rate Relief guidance, speak to their council or obtain suitable professional advice rather than treating this review as a relief scheme.
How Pubs Are Currently Valued
Pubs are commonly valued using a receipts and expenditure approach. In simplified terms, the Valuation Office considers the level of trade a reasonably efficient operator could be expected to achieve at the property. This is referred to as fair maintainable trade. A percentage is then applied to that figure to help determine rateable value.
The assessment is not simply a copy of the current operator’s turnover. The official methodology considers the property and its trading potential under an assumed tenancy. Location, style of operation, trading area, facilities, food and drink mix and other property characteristics can all be relevant.
The call for evidence asks whether the current categories and percentage scales reflect the pub market, how exceptional costs should be treated and whether the process gives ratepayers enough clarity. It also asks about industry engagement when valuation schemes are developed.
How Hotels Are Currently Valued
Hotels are also generally valued through a receipts and expenditure method. The process starts with trading information and works towards the amount that could reasonably be available for rent after allowing for operating costs and the tenant’s reward.
Hotel valuation must account for substantial differences between properties. Room numbers, category, facilities, food and beverage operations, conferences, weddings, spas, management arrangements and local market conditions can all affect the trading profile. The call for evidence asks whether the existing scheme handles those differences effectively and whether it is applied consistently to individual hotels.
It also asks whether summary valuations are understandable and whether information should be supplied earlier. For operators, that focus on transparency may be as important as the technical formula itself. A business cannot question an assumption effectively if it cannot see how that assumption was reached.
What The Review Does Not Change Today
- It does not automatically reduce a pub or hotel’s current rateable value.
- It does not replace the 2026 rating list.
- It does not decide the multiplier, reliefs or the total business rates liability for the sector.
- It does not guarantee that every recommendation will be accepted by the government.
- It does not remove the need to obtain professional rating or tax advice about an individual property.
The review is also geographically specific. Business rates are devolved. The valuation methods being examined by HM Treasury and the Valuation Office apply in England and Wales. Scotland is conducting a separate review of valuation in licensed hospitality, while Northern Ireland has its own arrangements.
Who Can Respond And What Evidence Is Useful?
The call is open to businesses, landlords, representative bodies, valuers, academics and individual ratepayers. A useful response should do more than state that a bill feels too high. The review is looking for evidence about the methodology, the data behind it and how it works when applied to real properties.
Before responding, an operator could assemble:
- The current and previous rateable values, together with the available valuation summaries.
- Evidence of genuine open-market rent where it is available and comparable.
- Trading information for the relevant valuation period, with exceptional events clearly identified.
- Property details that materially affect trading potential, costs or the way the venue operates.
- Examples of assumptions that appear unclear, inconsistent or disconnected from market practice.
- A clear explanation of the change being suggested and why it would improve fairness or transparency.
Operators should separate a concern about methodology from a broader concern about affordability. Both may be important, but this consultation has a defined scope. Evidence that answers its questions directly is more likely to help the review team understand where a valuation process may need attention.
Questions Pub Operators Should Consider
A pub response might consider whether fair maintainable trade reflects the property’s realistic trading potential, whether the category applied fits the venue and whether food, accommodation, events or other income streams are handled appropriately. Operators can also consider whether the scheme reflects variations between community pubs, destination venues, city-centre operations and pubs with rooms.
Where an operator believes the method produces an unrealistic outcome, the strongest response will explain which assumption creates the problem and provide evidence. A general statement about pressure on margins may not show whether the underlying valuation model is at fault.
Questions Hotel Operators Should Consider
Hotels may want to examine how the model treats occupancy, achieved room rates, food and beverage revenue, events, leisure facilities and operating expenses. Independent hotels, branded properties, inns, wedding-led venues and hotels with substantial restaurants may have materially different cost and income structures.
The review asks whether the scheme reflects the way hotel rents are agreed in the market and whether enough information is supplied to understand an individual valuation. Practical examples showing where apparently similar properties receive different treatment could be especially useful when the underlying circumstances are documented.
Why This Matters For Business Planning
Business rates sit alongside wages, utilities, rent, food costs, maintenance and finance when operators plan budgets. Uncertainty makes it harder to decide whether to refurbish, expand, change an offer or invest in marketing. A clearer valuation process would not remove those pressures, but it could make future liabilities easier to understand and challenge where appropriate.
Operators should keep marketing decisions tied to realistic capacity and commercial priorities. A pub facing quieter weekday sessions may need a focused local campaign, while a hotel with strong weekend occupancy may be better served by building meetings, weddings or midweek demand. The wider hospitality marketing budget should be based on the business problem being solved, not used as a reflexive cut whenever another cost rises.
Every account at Spotty Media sits within hospitality, so changes affecting pub and hotel planning need to be explained in operational terms rather than as abstract policy. Our role is not to advise on a property’s valuation, but we can help operators keep their marketing priorities clear while the commercial environment changes.
What Happens Next?
Responses must reach HM Treasury by 11.59pm on 16 October 2026. The review will consider the submissions and is expected to make recommendations by the end of March 2027. HM Treasury says that recommendations accepted by the government are intended to be implemented for the next revaluation.
For now, pub and hotel operators should read the official questions, decide whether they hold relevant evidence and obtain specialist advice where an individual valuation or liability is concerned. The most useful contribution will be specific, documented and focused on how the valuation method operates in practice.
