Business Rates Relief and The Reality for Welsh Hospitality

The Welsh Government’s announcement of additional business rates relief for parts of the hospitality sector marks an important intervention for businesses facing sustained cost pressures in Wales.

The measures apply for the 2026–27 financial year and are intended to provide further support for food and drink hospitality, including pubs, restaurants and live music venues, following the latest revaluation.

The Welsh Government has confirmed that eligible food and drink hospitality businesses will receive 15 per cent non-domestic rates relief for 2026–27, with the relief capped at £110,000 per business across Wales.

The relief will be delivered through local authorities using their discretionary powers, with eligible ratepayers required to apply through their local council after 1 April 2026. The measures sit alongside Wales’s existing permanent reliefs and transitional arrangements, rather than replacing them.

It is important to be clear about the nature of the support. This is a targeted, time-limited intervention, designed to mitigate the immediate impact of revaluation for parts of the sector. It does not represent a permanent change to how hospitality businesses are assessed or taxed for business rates purposes.

Hospitality businesses in Wales continue to operate in a challenging trading environment. Alongside revaluation-related increases in rates, operators are managing ongoing pressure from energy costs, labour shortages, wage inflation and subdued consumer demand.

Additional rates relief provides meaningful short-term support, particularly for pubs, restaurants and cafés that are most exposed to higher rateable values. However, many businesses will still face increased overall liabilities once transitional protections and temporary reliefs unwind. For that reason, the announcement should be understood as mitigation rather than resolution.

There is also an inevitable degree of complexity around eligibility. As with previous Welsh relief schemes, the precise scope of qualifying businesses will be critical, particularly for mixed-use premises and operators that combine food, drink and accommodation. The fact that the relief is administered locally reinforces the need for businesses to engage early with their local authority once application processes open.

UKHospitality has welcomed the Welsh Government’s recognition of the pressures facing hospitality businesses and acknowledged that the additional 15 per cent relief will provide some immediate support. At the same time, it has been clear that the measures do not go far enough to address the scale of the challenge facing the sector in Wales.

In particular, UKHospitality has highlighted that hotels are excluded from this targeted relief, despite having experienced some of the largest increases in rateable values at revaluation. The organisation has also noted that, even with relief applied, rates bills will continue to rise year on year for many hospitality businesses.

Their response reinforces a consistent message: while short-term support is welcome, hospitality in Wales needs a more comprehensive and durable approach to business rates if businesses are to invest, grow and retain jobs with confidence.

The Welsh announcement sits within a fragmented UK landscape. England has introduced targeted business rates relief for pubs and live music venues and has committed to reviewing valuation methodology. Scotland operates a different non-domestic rates regime, with its own mix of reliefs and transitional protections, while Northern Ireland has a separate valuation framework again.

For hospitality businesses operating across borders, these differing approaches add complexity and uncertainty. Support in one jurisdiction does not translate automatically into relief elsewhere, and strategic planning increasingly requires a clear understanding of multiple policy environments.

With Senedd elections scheduled for May 2026, hospitality policy in Wales is entering an important phase. The direction set over the coming months will have a lasting impact on how the sector navigates business rates, operating costs and longer-term resilience.

The Welsh Government’s announcement of additional business rates relief represents a welcome acknowledgement of the pressures facing hospitality businesses in Wales. It will provide short-term support for eligible hospitality businesses but it does not, on its own, resolve the wider challenges confronting the sector.

As attention turns towards the Senedd elections, the focus will increasingly be on whether devolved policy can move beyond temporary relief and deliver clarity, stability and long-term confidence for hospitality businesses across Wales.