Treasury Opens Pub and Hotel Business Rates Review After 2026 Valuation Shock

The Treasury is reopening a question hospitality businesses have argued about for years: whether the property-tax formula reflects how pubs and hotels actually trade.

Run a pub or hotel and today’s announcement may sound like immediate relief. It is a pub and hotel business rates review, but it does not rewrite the bill sitting on your desk this year. The real prize is a different valuation method from the 2029 revaluation onward.

At a glance

• HM Treasury — an independent review of pub and hotel valuation methods was launched on 24 August 2026.
• HM Treasury — business-rates specialist Jerry Schurder will report by the end of March 2027.
• HM Treasury — recommendations are intended to feed into the next revaluation in 2029; the 2026 valuations will not be changed by this review.
• HM Treasury — landlords, brewers, hoteliers and business owners can submit evidence, with responses due by 16 October 2026.
• Valuation Office Agency/GOV.UK — pubs in England and Wales are valued using Fair Maintainable Trade, with turnover forming a central input.
• The review targets how pubs and hotels are valued, not the business-rates multiplier itself.
• The sharp 2026 revaluation increases will remain in place while the review runs.
• Pubs are unusual because expected sustainable turnover directly influences their rateable value.
• Hospitality groups welcome reform but warn that a 2029 solution does not remove today’s cost pressure.

Why is the pub and hotel business rates review happening now?

The trigger is the 2026 revaluation. HM Treasury says both sectors experienced significant increases in rateable value as the system moved away from pandemic-era valuations and back towards a market shaped by the recovery in trade. Operators argue that the resulting numbers can overstate financial strength because higher turnover does not automatically mean higher profit when wages, food, energy, insurance and finance costs have also risen. Jerry Schurder, a long-standing business-rates specialist, has been asked to test whether the valuation methods still reflect economic reality.

How are pubs actually valued for business rates?

Pubs are not generally valued simply by measuring their floor space. The Valuation Office Agency starts with Fair Maintainable Trade: the annual turnover a reasonably efficient operator could be expected to achieve, excluding VAT. It then applies rental percentages to different income streams and adjusts for the property’s characteristics and location. That makes commercial sense because pub premises and the trade they support are tightly linked, but it also creates a direct connection between stronger sales and higher rateable value even when the cost of generating those sales is rising.

Why did the 2026 revaluation hurt so much?

The 2026 list is based on an April 2024 valuation date, after hospitality had largely recovered from lockdown distortions. Treasury guidance explicitly says previous pandemic comparisons may no longer be reliable. For some operators, that reset produced a large jump in assessed value just as other cost pressures remained elevated. The government has introduced lower retail, hospitality and leisure multipliers and specific pub relief, but those measures affect the bill after valuation. The review is aimed at the valuation engine itself.

Will this review cut bills soon?

No. The Treasury’s own notes say the 2026 valuations will not be affected. Schurder reports by the end of March 2027 so that recommendations can be considered before the next revaluation in 2029. The Morning Advertiser therefore warned that the exercise will not solve immediate pub cost pressure. That distinction matters for cash flow: a venue struggling this winter cannot assume the review will generate a retrospective reduction. Existing reliefs, appeals and transitional arrangements remain the relevant tools in the meantime.

Who gets a say in the new system?

The call for evidence is deliberately broad. Landlords, brewers, hoteliers, operators, representative bodies and valuation professionals have until 16 October to submit evidence. The useful submissions will go beyond saying bills are too high. They can show where Fair Maintainable Trade assumptions diverge from sustainable profitability, how hotel valuation methods behave in different markets and whether current evidence captures changes in customer habits since the 1990s. A technical review will be strongest if it can distinguish a flawed methodology from an unpopular tax outcome.

What happens next

Schurder’s team will collect evidence through the autumn and deliver recommendations by March 2027. Treasury ministers then have to decide which proposals are workable before the 2029 revaluation, while separate Budget decisions may change reliefs or multipliers earlier. Hospitality has won a formal review of the calculation it has criticised for years, but not a pause button on current bills. The measure of success will be whether the next valuation system becomes more predictable without simply shifting the tax burden to another group of businesses.