Government backtracks: Pubs to get 15% relief on business rates, two-year real-terms freeze
Anxious publicans are breathing easier as the government has backtracked on higher business rates for pubs. Relenting in the face of backlash, they’ve issued a 15% relief and promised a two-year real-terms freeze. In other words, pubs’ tax bills will go up only in proportion to inflation through 2028/2029.
According to the BII (British Institute of Innkeeping), only one out of 10 pubs would have been profitable under the terms released in November 2025. These terms included the end of Retail, Hospitality and Leisure (RHL) relief, which has applied in various forms since the COVID-19 pandemic began in 2020/21
Estimating your business bates bill
According to Carroll Accountants’ Director David Burr, the formula for business rates has never been more complicated. ‘There’s a lot of misinformation circulating about how to estimate your bill. People are applying the 15% discount to the wrong number,’ he says.
Rather than trying to work out your bill by hand, David advises pub owners to use the official UK.gov business rates calculator. This tool takes into account factors like rural relief and small business relief.
To use the calculator, you’ll need:
● Current rateable value
● Rateable value from 1 April 2026
● The reliefs found on your previous business rates bill
When you get your tax bill, check that the relief has been applied. Contact your local council if you don’t see it.
Who is eligible for relief?
The relief applies only to qualifying pubs and live music venues. To qualify as a pub, your business must meet these criteria:
● Open to the public
● Free entry except for occasional entertainment events
● Customers must be able to drink without needing to buy food
● Drinks must be available at a bar
The relief does not apply to other hospitality businesses, including restaurants, hotels, festival sites, casinos, or nightclubs.
What the relief means for pub owners
Between high costs and the public’s changing drinking habits, this remains a challenging time for pub owners. But this relief may well be the difference between tightening your belt and closing your doors altogether. The British pub, a centuries-old cultural institution, will live on.
Contact Carroll Accountants
Once you’ve seen your bill, Carroll Accountants can help you plan how to pay it without disrupting your cashflow. Reach out today for expert advice and support.