Public Houses: Business Rates and Employers' Contributions

To repair the public finances and help raise the revenue required to increase funding for public services, the Government has taken the difficult decision to increase employer National Insurance.

The Government recognises the need to protect the smallest employers which is why we have more than doubled the Employment Allowance to £10,500, meaning more than half of businesses with NICs liabilities either gain or see no change next year.

A Tax Information and Impact Note that covers the employer NICs changes was published by HMRC on 13 November and can be found here: https://www.gov.uk/government/publications/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl

Without any Government intervention, Retail, Hospitality and Leisure (RHL) business rates relief would have ended entirely in April 2025, creating a cliff-edge for businesses. Instead, the Government has decided to offer a 40 per cent discount to RHL properties up to a cash cap of £110,0000 per business in 2025-26 and frozen the small business multiplier.

By tapering RHL relief to 40%, rather than removing it entirely, the Government has saved the average pub, with a rateable value (RV) of £16,800, over £3,300 in 2025.

The Chancellor also announced a duty cut on qualifying draught products – approximately 60% of the alcoholic drinks sold in pubs. This represents an overall reduction in duty bills of over £85m a year and is equivalent to a 1p duty reduction on a typical pint. This reduction increased the relief available on draught products to 13.9%.