The Government has launched an independent review into how pubs and hotels are valued for business rates, promising to make the future system fairer and more transparent.
Business rates expert Jerry Schurder has been appointed to lead the review and will report his recommendations to the Treasury by the end of March 2027.
However, the review will not change the valuations introduced at the 2026 revaluation. Its recommendations are intended to be available for implementation at the next revaluation in 2029.
Treasury promises 'fairer' system
The Treasury said pubs and hotels had experienced significant increases in rateable value at the 2026 revaluation, in large part because pandemic-era valuations had ended.
It said concerns had been raised that the existing system did not properly reflect the realities of the pub and hotel markets.
Financial Secretary to the Treasury James Murray said pubs and hotels were vital to communities and local economic growth.
He said the Government was going further with a rethink of valuations in order to build a fairer system for the future.
Businesses invited to submit evidence
A call for evidence has also been launched alongside the review, allowing landlords, brewers, hoteliers, business owners, representative bodies and valuation professionals to contribute.
Schurder said stakeholder evidence would be central to assessing how existing valuation methodologies operate in practice and whether they remain fit for purpose.
Changes expected to feed into 2029 revaluation
Schurder is due to report by the end of March 2027, with the Government saying that timetable would allow recommendations to be implemented at the next revaluation.
The next business rates revaluation is scheduled for 2029.
That means the review offers the prospect of longer-term reform but does not reverse the increases in rateable values experienced by pubs and hotels at the 2026 revaluation.
Review follows 20% rates cut for pubs
The announcement follows the Government's decision last month to introduce a 20% cut to business rates bills for pubs, social clubs and qualifying live music venues from April 2027.
Hotels are included in the valuation review, although the previously announced 20% reduction applies to pubs, social clubs and qualifying live music venues rather than representing a general 20% cut for hotels.
Hospitality sector welcomes review
UKHospitality welcomed the Government's decision to examine the valuation methodology, while warning that business rates remain a significant burden on the sector.
The British Beer & Pub Association also welcomed the review, arguing that pubs had faced a disproportionately high business rates burden for years.
The Government says the review will help create a system in which pubs and hotels can plan more effectively, but its immediate impact will be consultation and analysis rather than a change to current valuations.