Government launches review of pub and hotel business rates in England and Wales

A government‑commissioned review of the methodology used to calculate local taxes in England and Wales is under way, with officials indicating that the findings could prompt substantive reforms to the current system. The inquiry, led by the Treasury’s Tax Policy Unit in partnership with the Ministry of Housing, Communities and Local Government, aims to assess the fairness, transparency and fiscal sustainability of both council tax and business rates, which together raise the bulk of revenue for local authorities.

Stakeholders, including local councils, business groups and consumer watchdogs, have been invited to submit evidence on how the existing formulas affect households and enterprises across different regions. The review will examine whether the weighting of property values, the treatment of empty dwellings and the allocation of central government grants reflect contemporary economic conditions. A final report is expected by early next year, after which the government may introduce legislative changes to adjust rate calculations, modify relief schemes or redesign the distribution of funds to ensure a more balanced fiscal framework for local services.