By Tilly Walder
When the Government announced a new round of business rates relief for the hospitality sector, many businesses breathed a sigh of relief.
Until they read the small print.
From April 2027, pubs, social clubs, and live music venues in England will receive 15 per cent business rates relief, worth up to £6,000 per property. The support is intended to ease rising costs, but cafés, restaurants, and coffee shops have been excluded.
For businesses already grappling with rising wages, higher National Insurance contributions, soaring food prices and energy bills, the news has landed like a bitter pill with the morning coffee.
Artisan Café owners, Aga and Damian Kowalski, say the exclusion is unfair because cafés and restaurants face “the same financial pressures as the rest of the sector”. Damian explained: “As the owner of a small independent café, I find it very disappointing that cafés and restaurants may be excluded from this scheme.
“We are a huge part of the hospitality industry, and face exactly the same challenges as many of the businesses that may benefit from these changes.
“Over the past few years, we’ve seen the cost of almost everything increase dramatically.
“The reality is that profit margins are becoming smaller while expectations and operating costs continue to rise.”
Isle of Wight East MP, Joe Robertson, welcomed the relief for pubs and live music venues but said it fell short of what was needed to support the wider hospitality sector.
He said: “Any relief for pubs, clubs and live music venues is welcome, but this 15 per cent scheme is only giving back a very small amount of the extra tax the Government is already taking.
“I would like to see the Government go much further and deliver a permanent 100 per cent business rate relief to all high street retail, hospitality and leisure.
“That would include pubs, restaurants and cafés up to a rateable value of £110,000 a year. On the Island, it would help rejuvenate the high street, support family-run businesses, and protect local hospitality jobs, including for younger people.
“The recent announcement feels like a gimmick to grab the headlines, but will make very little difference.”
Isle of Wight West MP, Richard Quigley, welcomed the additional support, saying pubs were assessed differently from most other hospitality businesses.
He said: “I’m really pleased that the Prime Minister has announced additional business rates support for pubs, social clubs, and live music venues.
“The reason I start with pubs is that they are valued differently from most other hospitality businesses. As the owner of a chip shop with a restaurant, I know first-hand how the system affects different businesses.
“While cafés and restaurants are generally assessed based on the rental value and/or square footage of their premises, pubs are valued according to their expected trading potential.
“This can leave pubs facing significantly higher rateable values than comparable hospitality businesses. Any increases following a revaluation are then phased in through transitional relief, meaning businesses do not face the full rise in their bill in the first year.”
Mr Quigley said the wider hospitality sector would also benefit from measures that increased customers’ disposable income.
He added: “The most important thing we can do for hospitality is put more money back into people’s pockets.
“When families have greater spending power, they are more likely to visit their local café, enjoy a meal in a restaurant or meet friends at the pub.
“Supporting consumers and supporting hospitality should go hand in hand.”
Whether pubs deserve the extra support is not the question. Few in the hospitality industry would argue they don’t. But the question being asked by many café and restaurant owners is why they have been left off the menu.
As cafés and restaurants continue to pay full business rates while others receive relief, one question remains: why is a latte worth less than a lager?
Isle of Wight Observer