The government’s announcement that pubs and live music venues will receive a 15% business rates relief, on top of the initiatives introduced at Budget 2025, provides targeted assistance for parts of the retail, hospitality and leisure (RHL) industry facing sustained financial pressure. However, some are calling for further measures to support hospitality businesses more broadly.
For many, this intervention comes after a prolonged period of rising costs. Increases in employer National Insurance contributions (NICs), energy prices and the National Living Wage have become a defining challenge for the sector, testing the resilience of even the most established businesses.
Although Budget 2025 aimed to rebalance the business rates system through lower multipliers for RHL properties, funded by higher rates on the most valuable premises, business rate liabilities remain high for many operators and are set to increase further following the next revaluation on 1 April 2026.
As pandemic-era relief is scaled back, business rates, for some, are set to add to increasing costs and further reduce profitability. From pubs and restaurants to hotels and leisure venues, operators are being forced to do more with less: maintaining service quality, retaining staff and investing in compliance, all against tightening margins and growing regulatory demands.
Specifics of the new relief
Pubs and live music venues will be entitled to
- 15% business rates relief in 2026-27;
- This will be in addition to any Transitional Relief or Supporting Small Business Relief; and
- Business rates will then be frozen in real terms for 2027-28 and 2028-29 – meaning they will only go up by inflation in those years.
Details of the eligibility criteria for a pub and live music venue can be found here. The relief will not apply to restaurants, cafes or hotels.
Key Points
Cost pressures across the retail, hospitality and leisure sector remain acute. While the business rates relief may offer some short-term support, it is a limited, three-year measure and does not remove the risk of reduced relief in the future. With further increases to the National Minimum Wage in April 2026, businesses will need to balance cost control with keeping roles sustainable and fairly rewarded.
Rising employment costs have prompted some employers to consider greater use of contractors or freelance workers to maintain flexibility. However, these arrangements come with complex tax and legal obligations, and businesses must ensure they comply with employment status and off-payroll working rules.
Whilst the employment allowance sees eligible employers reduce their annual employer NIC’s bill by up to £10,500, and the removal of the £100,000 eligibility cap brings more businesses within scope, higher employer NIC rates and a lower liability threshold remain a further cost pressure on the industry.
In response, many businesses may find they need to adapt further – reviewing pricing, reassessing workforce models and investing in productivity to help protect margins and long-term resilience. Doing so on a timely basis allows potential impacts to be anticipated and, where possible, mitigated, which is key in the current economic climate.
How M+A Partners can help
We work closely with clients to proactively assess challenges and opportunities, providing support to aid informed decision-making.
- Cashflow and Forecasting;
- Review of appropriate VAT schemes and exemption available; and
- Employment status advice.
For further information, or to discuss your individual business needs, please contact your usual M+A Partners’ adviser or use the details below.
