Pub and hotel business rates:
what we told the Treasury

For a trade-based assessment, the published rateable value is only the final line. The real work sits behind it: the trading period, category, fair maintainable trade, percentage scale and the valuer's adjustments.

Why has the Treasury opened a review?

The 2026 revaluation took effect on 1 April 2026 using rental values and economic conditions at 1 April 2024. HM Treasury reports a median increase in rateable value of 32.8% for pubs and 32.2% for hotels between the 2023 and 2026 lists.

Those figures need context. The 2023 list used an April 2021 valuation date, when hospitality was still affected by COVID restrictions and special adjustments. Across the longer period from 2017 to 2026, the Treasury reports increases of 4.1% for pubs and 18% for hotels.

The individual results are still striking. Five per cent of pubs had increases exceeding 150% at the 2026 revaluation. A movement of that size deserves a careful check of the trade figures, category and assumptions used for the property.

The issue for pubs is usually fair maintainable trade.

Most pubs are valued by applying percentage scales to the trade a reasonably efficient operator could maintain at the property. Actual accounts inform that figure, but the valuer can adjust them for over-trading, under-trading or income attributed to the particular operator.

The Treasury paper says the Valuation Office identified about 2,000 rents as relevant evidence for the 2026 pub scheme. Pubs are then placed within three broad trading categories and three geographical bands. Food, drink and accommodation receipts can attract different percentages.

The current scheme applies a higher food scale when food receipts exceed £650,000 or represent more than 55% of food-and-drink turnover. A pub can cross one of those thresholds without a matching step-change in the rental market.

Our submission asks for better disclosure of the rental evidence and clearer adjustment guidance for wet-led, food-led, accommodation, seasonal, event and community businesses. Where adopted fair maintainable trade differs materially from the accounts, the ratepayer should be shown the figure changed, the amount of the adjustment and the reason for it.

A 300-hotel sample has to cover a very wide market.

Open-market hotel rents are less common, so the Valuation Office uses full receipts-and-expenditure valuations for a sample and builds a scheme for the wider sector. The Treasury says approximately 300 hotels informed the latest scheme.

The composition of that sample matters. A Central London luxury hotel, an airport hotel, a coastal seasonal business and a rural wedding venue can have very different demand, income and cost patterns.

We have asked for a published breakdown of the sample by location, size, service level, operating model, seasonality and income mix. We have also asked for clearer treatment of brand, franchise and management value when deciding what trade a hypothetical operator could maintain at the property.

What Borough & Field has asked the review to change.

Our response was submitted to HM Treasury on 14 September 2026. The central recommendations are practical:

1. Give each affected ratepayer a summary valuation when the draft list is published.
2. Show the material movement from actual trade to adopted fair maintainable trade.
3. Publish more about the pub rental evidence and hotel sample without identifying businesses.
4. Run an additional quality check where an assessment changes exceptionally.
5. Bring more independent and regional operators into the evidence process.
6. Explain the principal areas of disagreement when an industry valuation guide cannot be agreed.

Earlier disclosure should allow factual errors to be corrected before liabilities begin. It may also reduce cases entering Check, Challenge, Appeal simply because the ratepayer cannot see how the assessment was calculated.

Have you checked your 2026 pub or hotel assessment?

Borough & Field is collecting practical observations from pub and hotel operators before the call for evidence closes. Useful material includes the 2023 and 2026 rateable values, the category used, the trade period, any adjustment to actual receipts and the clarity of the summary valuation.

You can send your observations to Borough & Field. Please remove staff, customer and other unnecessary personal information. We will not identify an operator or publish commercial figures without permission.

Evidence sent to Borough & Field is separate from the official process. Operators and representative bodies can respond directly to HM Treasury until 11.59pm on 16 October 2026.