In our 4 October preview we said the biggest cost change of the year had already landed on 1 April, and that we would cover the Budget once it was confirmed rather than guess at it. The Budget was published on 28 October 2026. UKHospitality called it the first Budget in several years to bring the sector any good news at all, while making clear that its campaign for a VAT cut carries on. That is a fair summary: something real on business rates, nothing on the two taxes that grow with every hour worked and every pint sold.

The short version

  • Small business rates relief for retail, hospitality and leisure properties in England will cover rateable values up to £18,000, tapering to £21,000, from 1 April 2027.
  • Pubs, social clubs and all but the very largest live music venues in England get an extra 20% rates relief from 1 April 2027, taking the total to 35%.
  • Business rates bills for qualifying retail, hospitality and leisure properties in England are capped at inflation for 2027-28 and 2028-29.
  • The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027.
  • No change to VAT for hospitality and no relief on employer National Insurance.
  • All Strategic Authorities will get the power to introduce an overnight visitor levy.

Business rates: the part that actually helps

Small business rates relief

From 1 April 2027 a qualifying retail, hospitality or leisure property in England with a rateable value of £18,000 or less pays no business rates, up from £12,000 today. Between £18,000 and £21,000 the relief tapers away, where the taper currently runs out at £15,000. The government estimates this takes around 70,000 more of these businesses out of rates altogether. For a café, a small bar or a village pub in that band, it is the most valuable line in the whole Budget.

The usual conditions, such as how many properties you occupy, still apply, so check your own position with your council rather than assuming the relief will appear on next year's bill.

Pubs, social clubs and live music venues

The 15% relief introduced earlier this year rises by 20 percentage points to 35% from 1 April 2027, for pubs, social clubs and all but the very largest live music venues (those with a rateable value of £1 million or more stay at 15%). The Treasury puts the combined relief at an average of over £3,000 per pub next year.

A two-year cap for everyone else in the sector

Restaurants, cafés, hotels and other qualifying properties that fall outside both groups still get something. Their bills are capped at CPI inflation in 2027-28 and 2028-29, so no qualifying property faces an above-inflation increase in those two years. It is paid for by extending the transitional relief supplement for a further two years.

Hotels get the cap but no targeted relief, a gap UKHospitality was quick to point out. With accommodation rateable values up by as much as 76% at this year's revaluation, a freeze in real terms is a freeze at a level many hotels already find hard to carry.

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England only

Business rates are devolved. None of these rates measures applies in Scotland, Wales or Northern Ireland, where the devolved governments receive extra funding through the Barnett formula and make their own decisions. If you trade outside England, watch your own government's budget rather than this one.

Wages: £13.21 from April 2027

The government accepted the Low Pay Commission's recommendations in full. Every rate rises by 3.9% on 1 April 2027:

  • National Living Wage (21 and over): £13.21 an hour, up 50p.
  • 18 to 20 year olds: £11.27 an hour, up 42p.
  • 16 to 17 year olds and apprentices: £8.31 an hour, up 31p.
  • Accommodation offset: £11.53 per day, up 43p, which matters to hotels and pubs that provide live-in staff accommodation.

To put the headline rise in site terms: a venue that rosters 600 hours a week at the National Living Wage faces an extra £300 a week, about £15,600 a year, before employer National Insurance. Add 15% employer NI on top and it is closer to £17,900. It rarely stops at the minimum either. Supervisors and team leaders paid a little above it will expect their differential to be kept, so the real increase usually runs further up the pay scale.

VAT and National Insurance: the asks that didn't land

The sector's main ask was a lower VAT rate for hospitality. It did not happen. Nor did relief on employer National Insurance, whether through a lower rate or a larger Employment Allowance, which UKHospitality had also pressed for. The Budget committed to no increase in the headline rates of income tax, National Insurance or VAT, so the position is simply unchanged: 20% VAT on what you sell, and 15% employer NI above a £5,000 threshold that stays frozen until 2031.

Smaller measures worth knowing about

  • Alcohol duty: Small Producer Relief becomes more generous from 1 February 2027, worth around £10 million a year to over 2,000 small producers across the UK. Relevant if you brew on site or buy from small local brewers and cider makers.
  • Overnight visitor levy: the government will legislate to give all Strategic Authorities the power to introduce one. No rate or start date has been set, but hotels, B&Bs and inns in those areas should keep an eye on it.
  • Outdoor space: the Better Regulation Executive plans to test ways of making it easier for pubs, bars and restaurants to make better use of outdoor space.
  • Community rescue: an extra £65 million to help communities in England rescue and revamp buildings and businesses at risk of closure, such as pubs and sports clubs.
  • Tied pubs: the government intends to add a guest beer provision to the Pubs Code in England and Wales.
  • Hiring: the £2,000 apprenticeship hiring payment for non-levy employers in England and the £3,000 Youth Jobs Grant for taking on eligible young unemployed people were both restated.

What to do before April

Check your rateable value against the new bands

Look up each property's rateable value on the GOV.UK business rates valuation service. At £18,000 or below you should pay nothing from April 2027, and between £18,000 and £21,000 you should see partial relief. Ask your council to confirm it will be applied, rather than finding out from the bill.

Work out the wage rise with your own hours

The 600-hour example above is only a guide. If staff clock in and out on the till with Staff Hours & Rotas, the hours each person actually works are already recorded and can be exported, so you can price the April rise per person and per site from real figures rather than an estimate. Set each person's hourly cost and the Labour cost vs sales report turns those hours into a daily labour cost and labour as a percentage of sales, so you can see what the new rates do to each day's numbers.

Review prices item by item, not across the board

A flat percentage on every price is the bluntest way to recover a wage rise. Your till's item sales, together with real ingredient costs from Procurement & Stock Control, show which dishes and drinks carry their weight and which can take a change without customers noticing.

Pubs: check the 35% appears on next year's bill

2027-28 bills normally arrive in March. If you run a pub, make sure the full 35% relief is shown, and query it with your council straight away if it is not.

The Budget took some pressure off rates for smaller sites and pubs, and added to the wage bill for everyone. For most operators the second number will be bigger than the first.HDS Cloud Apps

Where this leaves you

For a small café or a pub in England this Budget is a genuine improvement, and from April 2027 some will pay no rates at all. For a larger restaurant or a hotel, the gain is a two-year limit on how fast bills can rise, set against a wage bill that will go up by at least 3.9%. Either way the useful work is the same: know your rateable value, know your real hours, and decide on prices before the April increases arrive, not after.