What Would A Business Rates Cut Actually Change For Pubs On The Ground?

Pubs across the UK are waiting for news after signs that ministers will look again at rising business rates. The British Beer and Pub Association said the move could be a huge win for pubs and shows ministers listened and acted after long talks.

The BBPA said lower bills could help save local pubs and protect jobs. It added that many landlords have faced pressure since the pandemic and this change could ease that strain. Publicans, it said, would finally be able to breathe easier.

The trade body said it worked with ministers on a pub specific answer that would bring bills down in line with earlier promises made to pubs. It added that the detail of the announcement will matter greatly and said it is waiting to see exactly what will be announced.

Why Has The Chancellor Singled Out Pubs For Help?

Chancellor Rachel Reeves told BBC Breakfast that she is particularly worried about the effect of business rates on pubs. She confirmed that an announcement to soften the effect of coming rises is due in the next few days or weeks.

Reeves said pubs were badly hit during the pandemic and now face a sharper increase after Covid era relief ends in April and properties are revalued. Businesses across hospitality have said they will struggle to pay higher bills once that support comes to an end.

The government has already announced a £4.3bn fund to help businesses as relief is phased out. Reeves told the BBC that extra help will be in place for pubs before new rates come into force in April. She said temporary pandemic support cannot stay forever and timing matters.

Asked about cafes, small hotels and independent restaurants, Reeves said the biggest pressure right now sits with pubs. She added that many very small cafes do not pay business rates at all because their premises are not large enough.

Other businesses from shops to pharmacies have asked for similar help. The Conservatives and a number of Labour MPs have also called for more action. The rethink on pub rates comes after other recent government reversals, such as changes on inheritance tax for farms and dropping plans for mandatory digital ID checks at work. For many landlords, the next announcement will shape decisions on staffing, opening hours and survival through the year.

How Would A Business Cut Help Pubs?

Experts share their thoughts…

John O’Beirne, CEO and Executive Director of Square International Ltd, Block, Inc.

“A cut in business rates would be a real boost for pubs. For most, rates are one of the biggest fixed costs after rent and staff, yet they don’t flex with footfall, seasonality or bad weather. When trade dips, the bill stays the same, making it harder to hire, invest, or even keep the doors open during quieter months.

“Lower business rates would immediately free up cash that pubs can put back into growing their business by keeping more staff on during peak hours, upgrading kitchens and bars, or investing in digital tools that improve service and efficiency.

“At Block, we see that pubs using Square technology to speed up ordering, manage stock and reduce waste are better able to protect their margins. But many simply don’t have the headroom to invest while fixed costs remain so high. While a business rates cut wouldn’t solve every challenge facing the sector, it would remove a major drag on growth and give operators the confidence to plan for the future.”

Paul Gillooly, Director, Dot Dot Loans

“There will be immediate relief for pubs, many of which work with very tight margins, if business rates are cut. Closures are possible for small, community pubs, which makes the risk of losing their business rather high. Reduced rates in winter are better in managing high energy costs and borrowing rates. Pubs are also more likely to access emergency funding or invest in improvements if their fixed costs are lowered.”

Azhar Ahmed, Managing Partner, Business Helpline

“For many pubs, business rates are one of the single biggest fixed costs on the balance sheet. When margins are already wafer-thin and footfall is unpredictable, even a modest rates cut can be the difference between survival and closure.

“On the ground, a genuine rates reduction would immediately free up cash that pub owners could use to pay staff properly, invest in refurbishment, keep kitchens open longer, or simply manage rising energy and supplier costs. Right now, many landlords are choosing between paying business rates or paying HMRC and neither option is sustainable.

“The reality is that pubs aren’t failing because demand has disappeared. They’re failing because the cost base has become unmanageable. A meaningful business rates cut would give operators breathing space and confidence to reinvest, rather than constantly firefighting.”