Politics
Labour Hits Rural Landlords with ‘nice pub tax’
— 3 mins read
Nearly 39,000 pubs in England and Wales are being revalued
Pubs with river views, beer gardens, large car parks, or premium food menus face higher business rates from this April. Nearly 39,000 pubs across England and Wales are being revalued, and official guidance tells valuers to push the most appealing ones into higher tax brackets.
The Conservatives have branded it a 'nice pub tax'. Sir James Cleverly, the shadow communities secretary, said: 'Labour's business rates raid is heaping misery on to struggling pubs across England. Under Labour, it will be last orders for countless beloved watering holes.'
How the taxman decides what your local owes
The Valuation Office Agency, which sits under HMRC, does not value pubs the way it values shops. A shop's bill is based on its rent and floor space. A pub is valued on an estimate of its annual turnover if run in a 'reasonably efficient way', under official GOV.UK guidance.
The more a pub is judged capable of taking, the higher its rateable value, and the more it pays. Guidance for the 2026 revaluation, reported by the Morning Advertiser, tells valuers to weigh up attractive spots such as river frontages. Outdoor space with children's play areas, 'ample parking', character rural buildings, and premium-priced menus all count too. So does playing 'an active role' in the local community.
Under Labour, it will be last orders for countless beloved watering holes.
Landlords say the system punishes anyone who invests. Build a beer garden or upgrade the kitchen and the taxman assumes you can pay more, so your bill rises. Let the place decline and it falls. Publicans lobbied the Treasury and HMRC to change the criteria. They were turned down.
Why bills are jumping now
The last revaluation, in 2023, was based on values from 1 April 2021, in the middle of the pandemic, when trade had collapsed. Bills fell as a result. The 2026 list uses values from 1 April 2024, after the recovery.
Average pub rateable values have risen about 30%, from £30,945 to £40,245, according to House of Commons Library analysis. Some categories rose by up to 70%. A temporary 40% discount for hospitality properties has also ended. Without help, gross bills could have risen by between 45% and 76%. In plain terms, the sector is being taxed for surviving: the pubs that clawed their way back after Covid now carry the biggest increases.
The January U-turn, and the bills still to come
At the November 2025 Budget, Chancellor Rachel Reeves brought in permanently lower rates multipliers for hospitality and a £4.3bn transitional package capping most increases. When the industry pushed back, the government added more in January. Pubs and live music venues in England get a 15% discount on this year's bills, plus a two-year real-terms freeze, Reuters reported. That is worth around £1,650 for the average pub. Ministers say around 75% of pubs will see bills fall or stay flat this year.
Trade body UKHospitality says the average pub will still pay £4,500 more in 2027/28 and £7,000 more in 2028/29 than it does today. Its chief executive, Allen Simpson, said: 'We have long called for complete reform of the broken business rates system, which has seen hospitality pay far more than its fair share for decades.'
The backdrop is grim. Some 366 pubs closed permanently in England and Wales in 2025, roughly one a day, the Guardian reported. Those closures came before the revaluation and reflect wider costs, including energy, wages, and National Insurance rises.
A government spokesman said HMRC's expert surveyors 'use standard industry methods which have been used to value pubs for decades'.
