Business rates blow set to hammer York hospitality sector
One city centre pub has reported its annual business rates bill will more than double from £32,800 to £66,626 (plus inflation) over the next three years.
The financial shock comes as part of a nationwide revaluation of premises by the Valuation Office Agency.
Nationally, rateable values have increased by an average 19.2 per cent across England and Wales but a study by York BID says some businesses face an even higher increase.
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York BID carried out a study in its area after being approached by businesses fearful of large increases in their business rates then the new rates take effect from April.
The business group found the hospitality sector is expected to be hit hardest, with rateable values rising by a combined £10 million across 331 businesses - a 41 per cent increase compared to the 2023 valuation set during the COVID-19 pandemic.
York BID says its members in this sector face an estimated £1.9 million increase in business rates liabilities next year alone - a 24 per cent rise on the current financial year (2025/26) - with further increases expected in subsequent years.
Some of York BID's findings (Image: York BID)
York BID Executive Director Andrew Lowson said: “We were contacted by a growing number of city-centre businesses who were extremely worried about what the revaluation could mean for them.
“A 41 per cent increase in rateable value is not a marginal adjustment - it represents a step-change in costs for a sector already under intense pressure. Without meaningful intervention or transitional support, these changes risk undermining business viability, jobs, and the vibrancy of the city centre.”
York BID says these increases come alongside further cost pressures, including another rise in the National Living Wage and the potential introduction of a tourism tax. Many hospitality businesses say the cumulative pace of change is becoming unmanageable.
Hospitality employs 17,000 people in York and is responsible for 37 per cent of the city’s consumer spending.
Paul Gardner, owner of The Terrace Sports Bar & Kitchen in New Street: “We feel completely let down by the government’s approach to independent pubs. The 2026 revaluation is a disastrous blow - my rateable value is set to more than double.
“This isn’t just a rate rise, it’s a monumental increase that will inflate every cost we face, from our Sky subscription to our licensing fees. Why are small, independent businesses being hammered when highly profitable supermarket chains are barely touched?
Paul Gardner of The Terrace (Image: Pic supplied)
“This unfair weighting against hospitality jeopardises not only our short-term profitability but our ability to keep the doors open for the long term.”
Central government says it is capping business rates bill increases at 15 per cent in the first year (or £800 for smaller properties).
Eligible retail, hospitality and leisure properties face lower tax rates, it continued, with online giants paying more, it added.
A spokesperson for HM Treasury told the Press: “We’re protecting pubs, restaurants and cafés with the Budget’s £4.3 billion support package. This comes on top of our efforts to ease licensing to help more venues offer pavement drinks and put on one-off events, maintaining our cut to alcohol duty on draught pints, and capping Corporation Tax.”
