The upcoming budget this Wednesday is an event anticipated (and often dreaded) by employers and workers across the nation. In particular, the hospitality sector. After years of thin margins, escalating costs, and post-pandemic recovery pressures, this Budget could either reset the playing field or bring further financial problems.
One of the biggest talking points for hospitality this year is business rates. According to government plans, from 2026-27, retail, hospitality, and leisure (RHL) properties with a rateable value (RV) below £500,000 will benefit from permanently lower tax multipliers. This would mean lower business rates for hospitality employers across the country. For many small to medium hospitality businesses , such as local pubs, cafés, or restaurants, this promises some stability. However, the relief is not universal: larger premises (RV of £500,000 and above) will face a higher multiplier, potentially increasing their business rates.
In a more positive note for pubs and brewers, the Chancellor has committed to a duty cut on qualifying draught products, reducing duty by about 1p per average-strength pint. While this won’t solve all cost pressures, it does signal that the government recognises the cultural and community importance of pubs, and is willing to ease some of the tax burden for those on the front line.
Meanwhile, the sector isn’t just sitting back and watching, it’s pushing hard. UKHospitality, the trade body for hospitality businesses across the country, has rallied a coalition of hundreds of operators (hotels, pubs, restaurants, visitor attractions) calling for easier business rates, NIC reform, and even VAT cuts. The scale of job losses is worrying: the sector claims more than 80,000 jobs have been lost, and many businesses are pessimistic about growth without significant tax relief.
Only Wednesday will tell what 2026 will have in store financially for hospitality operators; for now, we’re hoping with bated breath for some long-awaited good news.
