Mounting Financial Pressure Across the Sector

Pub landlords across the UK are warning that planned business rates increases due in 2026 could have severe consequences for the hospitality sector. Many fear they will be forced to raise prices, make redundancies or shut their doors entirely.

In Gloucestershire, publican Phil Kiernan describes the forthcoming changes as the final nail in the coffin for his long-established business, while fellow landlord Luke Honeychurch says the tax rise would leave him unable to pay himself any wage at all. Despite these concerns, the Treasury insists its £4.3 billion support package is designed to protect pubs, restaurants and cafes.

The Human Cost for Publicans

At The Hog in Horsley, Mr Honeychurch has channelled his frustration into a social media persona, The Grumpy Landlord, after discovering that his monthly rates will rise from around £100 to £820 next year. While his online posts have gained significant attention, he notes that the financial reality remains stark. Already earning half the minimum wage at roughly £6 per hour, he warns the increase would eliminate his income altogether.

Why Business Rates Are Rising

The government maintains that it is backing the hospitality sector and has cut the business rates multiplier from 50 percent to 40 percent from 2026. However, publicans report that their rateable values have surged since the latest valuations were conducted based on stronger 2024 trading conditions. By contrast, the previous valuation came during the pandemic, when turnover was significantly lower.

Limited Relief Measures

While the multiplier cut and a phased introduction of higher bills offer some mitigation, Treasury officials acknowledge that rates will rise over a three-year period. Increases next year are expected to be capped at 15 percent for most properties.

UK Hospitality chief executive Allen Simpson warns that average rates for pubs will rise by 76 percent, adding around £12,000 annually, and predicts business losses and closures as a consequence.

A Sector at Breaking Point

For Mr Kiernan at the Farmer's Boy in the Forest of Dean, the expected £16,000 annual increase comes amid rising energy costs, higher wages and increased national insurance contributions. He has warned customers and staff that closure may be unavoidable without further government intervention.

He believes the current approach risks draining the vitality from an already strained industry.

‍