Pub and hotel finance in 2026: what the Treasury review means for your borrowing plan
The Treasury has commissioned an independent review of how pubs and hotels are valued for business rates. It reports in March 2027 and cannot change a bill before 2029, so here is what it means for a purchase, a refit or a growth facility you are planning now.
Reading time6 min read
CategoryBusiness guides
Written byThe bizbritain team
If you run a pub or a small hotel, your rates bill has been the hardest number in your plan to forecast. On 24 August 2026 the Treasury commissioned an independent review of how pubs and hotels are valued for business rates, and set the reviewer a March 2027 deadline. That is genuinely good news. It is also slow news: nothing the review recommends can reach a bill before the next revaluation in 2029. Between now and then you still have a purchase, a refit or a growth plan to fund, and the numbers you need to fund it with are already knowable.
Section 01
What the review actually changes
HM Treasury has appointed Jerry Schurder as independent reviewer to look at how the current valuation methods for pubs and hotels work in practice, and whether they are still fit for purpose. He reports back to the Treasury by the end of March 2027.
The reason the sector has pushed for this is technical but consequential. Most business premises are valued on what they would rent for. Pubs and hotels are valued on a turnover-based method instead, which means the rateable value moves with how much trade the property is judged capable of doing. Trade associations have argued for years that the method has barely changed in three decades and no longer reflects how the sector actually operates.
The Valuation Office Agency's own figures show why it came to a head. At the April 2026 revaluation, rateable values for public houses and pub restaurants rose by an average of 30 per cent, and by around 70 per cent where the property includes lodge accommodation, against an average rise of 19.4 per cent across all English properties.
30%average rise in pub and pub restaurant rateable values at the 2026 revaluation
19.4%average rise across all English properties at the same revaluation
£1,650Treasury estimate of the saving on an average pub bill in 2026/27
2029the next revaluation, and the earliest any recommendation could take effect
Two dates are worth putting in your diary. The call for evidence closes on Friday 16 October 2026, and submissions go to the Treasury by email at PubsHotels.Valuation@hmtreasury.gov.uk. If you have a rateable value you believe misreads your trade, that is the window to say so with numbers attached. The second date is 2029, the next revaluation, which is when the government has said it wants any recommendations implemented. Your 2026 valuation stands in the meantime.
One point of geography, because it changes whether any of this applies to you. Business rates are devolved. The review, the reliefs and the multipliers described here are for England. Scotland, Wales and Northern Ireland run their own non-domestic rates systems and set their own reliefs.
Section 02
The 20 per cent cut from April 2027, and who qualifies
The review sits on top of relief that has already been announced, and the two should not be confused. A 15 per cent reduction applied to pubs and live music venues from April 2026. A further 20 per cent cut for pubs, social clubs and live music venues was announced for April 2027. The Treasury put the effect at roughly £1,650 off the average pub's bill in 2026/27.
Note who is named and who is not. The April 2027 cut covers pubs, social clubs and live music venues. Hotels are inside the valuation review but not inside that relief, which is one reason the hotel trade has been the louder voice in the consultation.
Relief is also not the whole trajectory. UK Hospitality has projected that an average pub's rates will be around £4,500 higher in 2027/28 than today, and around £7,000 higher in 2028/29, once the wider changes work through. Allen Simpson, the trade body's chief executive, described the review as much needed and positive while warning that it is medium-term reform that will not solve immediate financial pressures.
That is the honest shape of it. There is a discount in front of you, a rising cost curve behind it, and a structural fix that arrives in 2029 at the earliest. A borrowing plan built on the first number alone will be wrong by 2028.
Section 03
Why the timing matters if you are buying or refitting
Uncertainty is expensive when you are borrowing, because a lender prices what it cannot forecast. The useful thing about the announcement is not the relief, it is that the next three years of rates policy are now unusually legible. You can put a real number on 2026/27, a real number on the April 2027 cut, and a defensible range on 2028/29 using the trade body's own projections. Vendors are working from the same information, which matters when you are negotiating on a pub's maintainable trade.
What that means in practice is that a rates line in a business plan can stop being a shrug and start being a schedule. That is the single thing most likely to move a hospitality application from difficult to workable, because the objection lenders raise on pub and hotel deals is rarely the sector itself. It is that the cost base looked unforecastable.
It also means that waiting for the review has a price. If the plan is to buy a site, take on a lease, refit a kitchen or add rooms, the review will not have changed anything by the time you need the money. Delaying until March 2027, or until 2029, is delaying past the point where the answer is useful.
Section 04
Financing a pub or hotel while the review runs
We do not make credit decisions and we do not lend the money. What we do is work out which part of the market a hospitality deal belongs in, which is usually where these applications go wrong. High-street banks assess pub and hotel purchases against a fairly narrow template, and a decline there is not a verdict on the business.
Step 1
Fix the rates line before you model anything else
Pull your current rateable value and your 2026/27 bill, apply the announced reliefs, and build the 2027/28 and 2028/29 rows using the published projections rather than an assumption. A funder will test this line first on a hospitality deal.
✓Check the valuation itself. If the turnover assumption behind it does not match your trade, the call for evidence closes on 16 October 2026.
Step 2
Split the ask into the parts lenders actually price
A pub or hotel deal is rarely one loan. The property or leasehold premium, the trade fixtures and kitchen kit, the refit, and the working capital to carry you through a quiet first quarter are four different risks, and they are priced by different parts of the market.
Which of these four is actually holding the deal up?
Step 3
Match the route to the stage you are at
A first small venture may fit the government-backed Start Up Loans scheme, which the British Business Bank runs at £500 to £25,000 per founder and up to £100,000 per business, for businesses trading for up to 60 months or not yet trading. An established operator buying a site is in structured acquisition lending instead, often alongside asset finance and, on the right deal, vendor finance. Eligibility for any of these is subject to status, affordability and lender criteria.
Step 4
Go with the seasonality in the file, not hidden
Hospitality trade is seasonal and every experienced funder knows it. A forecast that shows a thin February and explains how it is covered reads better than one that quietly smooths it away.
The review is a good outcome for the sector and it is worth engaging with before 16 October. It is not a reason to hold a plan. If you are weighing a purchase, a refit or a growth facility over the next eighteen months, the rates picture is now clear enough to build on, which is more than pub and hotel operators have been able to say for most of this decade.
If the next step is buying a site, funding a business purchase is specialist work. The structure matters as much as the rate. bizbritain works across 100+ lenders, including those comfortable with hospitality. For a refit or working capital, we arrange growth facilities from the same panel.
This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.
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