Hospitality operators across the UK are raising concerns that changes announced in the Autumn Budget could leave many businesses facing unsustainable cost increases next year, despite government assurances of support.

Mark Wrigley, owner of Atlas Bar in Manchester city centre, said he watched the Budget closely, hoping for measures such as VAT reductions or further business rates relief. While Chancellor Rachel Reeves spoke of a “new golden era for hospitality”, Wrigley says the reality on the ground looks very different.

Business rates reassessments drive higher bills

The Budget confirmed that retail, hospitality and leisure premises would benefit from lower tax multipliers, resulting in what the government described as the lowest business rates in decades. However, many venues have simultaneously seen their rateable values reassessed upwards by the Valuation Office Agency, meaning lower multipliers are being applied to significantly higher valuations.

For some operators, this has resulted in larger overall bills. Wrigley says his venue’s rateable value has increased from £63,000 several years ago to £97,000 for 2026, despite no material change in trading conditions. Similar stories are being reported across the sector, with some businesses experiencing dramatic jumps that appear disconnected from actual rental costs.

End of reliefs and rising employment costs

Further pressure comes from the planned withdrawal of the pandemic-era 40 percent business rates discount from April 2026. Industry body UKHospitality estimates that the average pub will see rates rise by £1,400 next year, increasing sharply in subsequent years.

Alongside this, hospitality firms are also absorbing higher employer National Insurance contributions and rising minimum wage costs. Wrigley estimates these combined pressures will leave him needing to find an additional £24,000 next year, prompting staff redundancies and reduced hiring.

Government response and sector concerns

A spokesperson for HM Treasury said a £4.3 billion support package would limit bill increases to around four percent for many venues. Ministers have also highlighted licensing reforms and transitional reliefs.

However, many operators warn that without further reform, including greater transparency around valuations or a reduction in VAT, closures and job losses across the sector may accelerate in 2025.

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