The Welsh Government’s decision to exclude hospitality from business rates reform will hit the sector with £131 million in additional cost over three years, UKHospitality Cymru is warning.
A new transitional relief scheme has been announced to help businesses manage rates changes from next April. The Welsh Government said an additional £116 million of support would be made available as business rates in Wales are updated to reflect current property values.
Any business whose bill increases by more than £300 next year because of the revaluation will have the rise phased in gradually over two years, rather than paying the full increase immediately. In addition, the multiplier will be reduced for all ratepayers. The normal business rates percentage will drop to 0.502 whilst small and medium-sized high-street retailers will get a lower rate of 0.350.
But analysis by UKHospitality Cymru suggests that, compared to what is currently being paid, the hospitality sector’s business rates bill will rise by £19.6 million in 2026/27 (a 23% increase), by £43.3 million in 2027/28 (a 51% increase) and by £67.7 million in 2028/29 (an 80% increase).
It said the “dramatic” increase is a result of rateable values increasing by 26%, business rates relief being removed, and hospitality being excluded from the Welsh Government’s business rates reform.
UKHospitality Cymru has warned that soaring rates bills will accelerate business closures and job losses across Welsh communities, unless the Welsh Government rethinks its currents plans for business rates reform and extends it to include hospitality.
David Chapman, Executive Director of UKHospitality Cymru, said:
“These staggering increases are the direct result of Welsh Government stripping out any meaningful business rates support from hospitality businesses.
“An extra £131 million in costs for the sector is simply too much to bear and it will sadly result in business closures and job losses, hitting Welsh high streets and communities.
“That will be the consequence of the Welsh Government’s failing to support hospitality.
“Our local pubs, restaurants, hotels and cafes have been penalised for far too long by a broken business rates system that hits bricks and mortar businesses harder than anyone else. The decision by the Welsh Government to overlook hospitality from its reforms is deeply damaging and will be devastating for Wales.
“We need help quickly and the Welsh Government needs to urgently act. It must overhaul its business rates reform to include hospitality to avoid the disastrous consequences these significant extra costs will have on Welsh hospitality.”
