Autumn Budget gives hospitality rates relief, little else
A higher business rates threshold removes 70,000 firms from paying altogether, but VAT and National Insurance go untouched, splitting the sector's reaction.
The UK's 2026 Autumn Budget raised the business rates relief threshold for hospitality from £12,000 to £18,000, taking an estimated 70,000 businesses out of rates altogether, but left VAT and National Insurance untouched despite sector lobbying for both.
The package, delivered on October 28, also raised the National Minimum Wage by 3.9% and extended it to workers aged 18 to 20. UKHospitality says the rates change means bills for retail, hospitality and leisure businesses in England will be frozen in real terms, reduced or cut to zero for two years from April.
A petition with more than 400,000 signatures had called for VAT on hospitality to drop to 10%, part of UKHospitality's four-point campaign ahead of the Budget. It did not move. Nor did the government announce any change to employer National Insurance contributions, which operators have named as a cost pressure since last year's increase.
Relief for small operators, no answer for the sector's bigger bills.
A rare positive, with a large caveat
Allen Simpson, chief executive of UKHospitality, called it the first Budget in years with "any positive news" for the sector, while also noting hospitality still pays 82p in business taxes for every £1 it earns and repeating the call for a VAT cut. Andy Lennox, owner of Fired Up Collective, read the same measure differently, saying rates relief reaches only 2.9% of hospitality venues and calling the Budget "a disaster" for the sector.
Markus Thesleff, founder of Thesleff Group, said the higher threshold does nothing for larger operators, whose costs have "almost doubled in five years." Tommy Banks, chef-patron of the Tommy Banks Group, called the Budget "incredibly frustrating" and warned the relief does not match the scale of the problem, even as UK hospitality insolvencies have recently been falling.
What the Budget left out
Dom Jacobs, founder of Ardent Pub Group, welcomed the rates relief for eligible operators but said it does not help pubs with large teams, and called instead for a VAT cut, a beer duty freeze and interest-free energy loans. A separate "Holiday Tax," an overnight visitor levy, was mentioned without detail on how it would work; Jon Hendry Pickup, Butlin's chief executive, questioned its purpose and warned it could deter domestic visitors.
The British Institute of Innkeeping puts pub profitability at one in four venues for 2026 and estimates the minimum wage rise will add around £1,000 per full-time worker from April 2027. Whether the rates relief outweighs that bill, for the businesses it actually reaches, is the question the sector will spend the next year answering.
