A post-Budget business rates bombshell could see scores of pubs closing as they face massive hikes in the amount they pay. The increases fly in the face of the promise made by Chancellor Rachael Reeves in her Budget statement to parliament that business rates would be cut to the lowest rates since 1991.
But it has now emerged – “under the cover of darkness” one commentator has said – that as a result of a revaluation of business rates it’s thought that bills for small pubs – including energy, VAT, NIC and staff wages – will rise by £3,807 a year from 2026. The rise for medium size pubs will be £11,085.
The rises are the result of a new, much higher assessment of the value of the buildings used to calculate business rates, meaning the levy will increase significantly next year for the average high street business.
The Chancellor also failed to mention that the Covid-period 40 per cent discount on business rates will end in April 2026.
The two changes more than wipe out any benefit from the reforms Rachel Reeves announced in the Budget.
National Chairman of CAMRA, Ash Corbett Collins, says: “The increase is business rates is devastating news for a sector that was already under immense pressure and was promised support.
“Only a month ago the Prime Minister was quoted as saying that ‘pubs and bars are the beating heart of our communities’ and yet this reckless decision puts that beating heart at direct risk
“We needed genuine action from the Chancellor in the Budget but unfortunately there has been none. We are bitterly disappointed.”
On top of these increases, the Chancellor said in her Budget statement that “alcohol duties will rise in line with inflation.” This mean that excise duty paid by brewers will go up and the increases will be passed on to pubs.
The price of a pint will increase and will see more customers deserting pubs to buy cheap supermarket beer.
Eight pubs a week are closing and the number is expected to rise substantially as new taxes start to bite.
Kate Nicholls, chair of UK Hospitality, comments: “Online giants, office blocks and out of town supermarkets will have better deals than local pubs.
“There will be huge increases in rateable values.”
UK Hospitality calculates that the average pub’s business rates would increase by 15 per cent next year, adding £1,400 to the typical tax bill.
By the following year, the bill would be £4,500 higher and by 2028 they would pay an extra £7,000, an increase of more than 65 per cent on today’s level.
In total, the average pub will pay an extra £12,900 over the next three years.
Brian Whiting runs five pubs in Kent and he says: “Three of my pubs will have increases of £70,000 a year between them.”
Phil Thorley who runs the 18-strong Thorley Taverns pub group, says costs for his pubs will rise by £62,000 a year.
Rob Moore runs two pubs in the Bristol area and says he will have to pay £8,000 more per year in rates and other costs.
“A pint in Bristol already costs £7,” he says. “That’s London prices.”
Sir Tim Martin, founder and chairman of the Wetherspoon pub group, adds: “I should have opened a supermarket in 1979, not a pub.” He has complained for years that supermarkets undercut pubs as they can claim back VAT on beer and He criticised the unfairness of the way pubs and supermarkets are treated, saying pubs pay 20 times more in business rates than stores.
•Sacha Lord, chair of the Night Time Industries Association, calls the Budget “a shocking betrayal”.
Writing in the Daily Mail on 2 December, he says: “I honestly do not see how pubs can survive this hammer blow. Pubs, a mainstay of our culture, will cease to exist.”
He adds that Lara Trubshaw of the St Agnes Inn in Cornwall, has told him her business rates have gone up from £18,000 a year to £73,000.
Pictured: Admiral Byng, Potters Bar. Wetherspoons pub: the company has complained that while pubs pay VAT on beer supermarkets claim it back..
First published What’s Brewing, December 2025 and amended.
