The Business Rates Crisis: Why Pubs are being pushed to the brink.

For years, pubs have been told they are the heart of their communities – places of welcome, connection and local identity. Yet recent increases in business rates tell a very different story. They represent one of the most damaging, ill‑conceived pressures facing the pub trade today, and for many operators they are the final straw.

This is not a gentle adjustment. It is a shock.

A System That No Longer Makes Sense

Business rates were designed to be a fair way of taxing commercial property. In reality, they have become opaque, inconsistent and deeply unfair - particularly for pubs.

Unlike most other businesses, pubs are often valued not on their physical size but on their turnover. That means:

• A busy pub is punished for being successful

• Investment in food, staff and service leads directly to higher tax

• Successful operators pay more tax

• Growth is actively discouraged

Meanwhile, restaurants, cafés and many other hospitality businesses are assessed largely on square footage. Two neighbouring businesses with similar footprints can face wildly different rates bills simply because one happens to be a pub.

This is not taxation based on ability to pay – it is taxation based on activity.

Sudden, Severe and Unjustified Increases

The most recent revaluations have landed like a hammer blow. In many cases, rates have risen overnight, by eye‑watering percentages, with little explanation and no meaningful opportunity to challenge the assumptions behind them.

For pubs already dealing with:

• Rising food and drink costs

• Escalating labour bills

• Higher energy prices

• Falling discretionary spend

…a sharp increase in business rates is not just painful - it is existential.

This is especially galling given that many pubs are seeing profits fall, not rise. Corporate bookings are down. Christmas parties are fewer and smaller. Customers are watching every pound. Every input to the business has gone up substantially. Yet rates bills suggest pubs are somehow booming.

They are not.

What This Means in Real Numbers

To understand just how distorted the system has become, it’s worth setting out our figures clearly and unambiguously.

At the latest revaluation, our rateable value increased by 55%. That alone is significant, particularly at a time when margins are tightening and demand is fragile.

However, the impact on what we actually pay is far more severe.

Our business rates bill (what we actually pay) has increased by 123%. It has more than doubled.

Even once the government’s much-vaunted relief is applied – phased in over the next three years – we are still left with a 77% increase on our previous rates liability.

That is not relief. It is simply a slower route to a vastly higher tax burden.

This increase bears no relation to reality on the ground. Trade is not surging. Profits are not rising. In fact, rising labour, food, drink and energy costs mean that many months which were previously profitable are now marginal or loss-making.

At the same time, restaurants have seen little to no increase in their business rates. The reason is structural: restaurants are generally valued on square footage, while pubs are often valued on turnover.

As a result, two hospitality businesses of similar size, on the same street, serving the same community, can face radically different tax bills - with pubs uniquely penalised for being busy.

This disparity is not accidental. It is baked into the system, and it is at the heart of the problem.

Explainer: How Does a 55% Revaluation Become a 123% Rates Increase?

This is the question we are asked most often – and it exposes how opaque the system has become.

• The rateable value is HMRC’s assessment of what a property could theoretically earn

• Pubs are assessed using turnover-linked formulas, not physical size

• The Government then applies a multiplier (expressed as a percentage) to the valuation to determine the amount payable.

• Until recently, pubs benefited from a 40% discount on the amounts payable. This has now been removed.

• When the rateable value rises sharply, the multiplier applied to it can amplify the increase

• Transitional relief does not reduce the final bill – it merely delays how quickly it is reached

The result is that a 55% uplift in rateable value can translate into a far larger increase in actual cash paid.

• Our current rates are: £42,800. Our current annual bill is £12,814,32

• Our new rates will be: £66,500 (an increase of 55%).

• Our revised annual bill will be:

1)    £28,595 (an increase of 123%) or, with the so called relief being offered to pubs which will limit the increase to 4% (according to the government),

2)    £22,636 (an increase of 77%)

This complexity shields the system from scrutiny. But the outcome is simple: pubs are being taxed on a scale that bears little relation to profitability or ability to pay.

Pubs Are Not Just Another Business

Pubs operate on tight margins and long hours. They are labour‑intensive, heavily regulated and deeply exposed to shifts in consumer confidence. They also provide something that cannot be measured in spreadsheets: social value.

Pubs:

• Employ millions across the UK

• Support local suppliers and farmers

• Act as informal community hubs

• Reduce isolation and improve wellbeing

And yet they are taxed as if they were cash machines.

When a pub closes, it rarely reopens. The loss is permanent – to the high street, the local economy and the community it served.

A Chilling Effect on Investment

High and unpredictable business rates kill ambition.

Why invest in better food, better staff, better buildings if success is met with a higher tax bill? Why take risks, improve standards or extend opening hours when the reward is being re‑rated upwards by a system that takes no account of costs or profitability?

This approach actively undermines the very regeneration and levelling‑up politicians claim to support.

Time for Reform - Not Tweaks

Temporary reliefs and short‑term discounts are no longer enough. The system itself is broken. We don’t want reliefs and handouts. We want a fair system.

We urgently need:

• A move away from turnover‑based valuation for pubs

• Transparency in how rates are calculated

• Fair treatment across hospitality sectors

• A recognition that pubs cannot absorb endless cost increases

You cannot keep milking the cow without feeding it.

The Bigger Question

If government truly values pubs - not just in speeches, but in practice - then business rates reform must be central to that commitment.

Because without it, more pubs will close. More communities will lose their gathering places. And an industry that has shown extraordinary resilience will finally run out of road.

This is not special pleading. It is a plea for fairness.

And it is long overdue.