Budget 2026: what it means for the pub. Have we been forgotten?

First, which Budget are we talking about?

This one is for real, so no guesswork. The Chancellor, John Healey, set the date on 31 July and delivered the Autumn Budget 2026 to the Commons on Wednesday 28 October. The House of Commons Library published its summary the next day.

It follows the November 2025 Budget. That one set the business rates and duty rates we are trading under now. It also pushed the trade into a winter of protest over rates bills.

Most of what was announced last week doesn’t bite until 1 February 2027 (duty) or 1 April 2027 (rates and wages). So you have one Christmas and one January to plan.

Business rates: the bit that went our way

Let’s start with the good news, because there is some.

The background first. On 1 April 2026 the old retail, hospitality and leisure (RHL) discount ended. In its place came permanently lower RHL multipliers: 38.2p for properties with a rateable value (RV) under £51,000, and 43p from £51,000 up to £499,999. On the same day the 2026 revaluation came in, based on values as at April 2024.

The trouble was that many pub RVs jumped. Lower multipliers on a much higher RV still meant a bigger bill. UKHospitality worked out that, with no further help, the average pub’s rates would rise 76% over three years, an extra £12,900. In January the government brought in a 15% pubs and live music venue relief for 2026/27, which it put at £1,650 for the average pub.

Last week’s Budget builds on that. For England, from 1 April 2027, according to the government’s business rates note:

• Pub relief goes from 15% to 35% for 2027/28 and 2028/29. It covers pubs, social clubs and all but the very largest music venues.
• Small Business Rates Relief thresholds rise for qualifying RHL properties: full relief up to £18,000 RV (up from £12,000) and tapered relief up to £21,000 (up from £15,000). The BII says that takes about 3,500 more pubs out of rates altogether.
• A real-terms freeze. Eligible RHL, pub and music venue bills are capped at CPI inflation in 2027/28 and 2028/29. Increases from your own improvements don’t count, and nor does losing other reliefs.
• 2027/28 multipliers: 39.5p small business RHL, 44.5p standard RHL and 52.5p for £500,000-plus. The RHL rates sit 5.2p below the non-RHL equivalents.

Treasury costings put the pub relief at £160m in 2027/28. The Chancellor said the money comes from raising machine games duty to 25% on higher-stake machines, while shutting vape shops and adult gaming centres out of the relief.

Our take: this is the first time in a while the rates system has bent towards pubs rather than away from them. But keep it in proportion. UKHospitality had asked for the RHL discount to go to 20p, the most the law allows. We’ve ended up with a 5.2p gap plus a pub-specific relief that lasts two years. That’s a sticking plaster, not a cure. It’s also England only. Rates are devolved, and Wales and Scotland get nothing from this.

A rough sum, our own and before transitional relief, the CPI cap or any other relief. Take a pub with an RV of £30,000. In 2026/27 that’s £11,460 at 38.2p, less 15%, so about £9,741. In 2027/28 it’s £11,850 at 39.5p, less 35%, so about £7,703. That’s around £2,000 better off. Your own bill will depend on the reliefs you already get, so check it with your council.

Beer duty and draught relief: up with inflation

This is where the mood soured. The BBPA wanted a duty freeze and a draught discount raised to 30%. It got neither.

All alcohol duty rates go up by RPI, 4.55%, on 1 February 2027. From the Budget rates annex:

• Beer at 3.5% to 8.4% ABV: £22.58 rises to £23.61 per litre of alcohol
• Draught beer at the same strengths: £19.45 rises to £20.34
• Draught cider at 3.5% to 8.4% ABV: £8.95 rises to £9.36

On our sums, duty on a pint of 4.5% draught goes from about 49.7p to about 52p, before VAT. The draught discount stays at roughly 14% below the non-draught rate, so the gap hasn’t widened at all.

There is something for small producers. Small Producer Relief gets more generous, worth £10m a year to around 2,000 small brewers and cider makers. Indirectly, that helps a free house that buys local.

The Red Book also says the government intends to legislate for a guest beer right in the Pubs Code for England and Wales. It applies to tied tenants of the pub companies the Code covers, not to us. Even so, more doors opening for independent brewers is good for the whole market. No start date has been given.

Wages: another 50p an hour

The National Living Wage goes from £12.71 to £13.21 on 1 April 2027, a rise of 3.9%. The 18 to 20 rate goes to £11.27, and the under-18 and apprentice rates go to £8.31.

That’s lower than many feared, and it’s what the Low Pay Commission recommended. But the BII reckons it adds about £1,000 for every full-time member of staff, and says that wipes out roughly the £1,100 the average pub gains from the extra rates relief. Do the sums against your own rota before you take any comfort from the rates headlines.

Employer NI: no change, no help

The rates are unchanged for 2027/28. Employers still pay 15% above a secondary threshold of £96 a week (£5,000 a year). The Employment Allowance stays at £10,500, and under-21s and apprentices under 25 are still zero-rated up to £967 a week.

The trade asked for relief and got none. That £5,000 threshold is what makes every extra part-timer expensive, and it’s been left where it was.

VAT: still 20%

VAT stays at 20% standard, with the registration threshold held at £90,000. There was no hospitality cut, despite the 10% campaign led by UKHospitality and backed by the BII. For a lot of operators that was the main thing they wanted, and it’s the main reason the reaction has been sour.

The smaller print

• Soft Drinks Industry Levy goes up on 1 April 2027: the standard rate from £2.08 to £2.25 per 10 litres, and the higher rate from £2.78 to £3.01. Watch your mixer and post-mix prices.
• Machine games duty: from April 2027, machines with stakes over £1 or prizes over £100 move to 25%. Healey said the change was about “protecting pubs and seaside arcades”. Ask your supplier which band your machines fall in.
• Overnight visitor levy: mayors get the power to bring one in from 2028. If you let rooms, keep an eye on it.

What the trade said

Nobody was cheering.

The BBPA’s Emma McClarkin called the rates package “a very welcome step”, but said the duty rise “will undoubtedly push up the price of a pint”.

UKHospitality’s Allen Simpson called it “the first Budget in several years to deliver any positive news for hospitality”, and said the fight for a VAT cut goes on.

CAMRA’s Ash Corbett-Collins said increasing taxes on pints in pubs “is the wrong decision”, but welcomed the guest beer right.

The BII’s Steve Alton put it most bluntly. The Prime Minister had promised pubs the cavalry was coming, and “today, it simply didn’t arrive”. He added that only one in four pubs is making a profit in 2026.

The Morning Advertiser’s editor, Ed Bedington, went further. He said the Budget delivered “pretty much bugger all”.

So, have we been forgotten?

Not forgotten. Half-remembered, maybe.

On rates, the government has clearly listened. The 35% relief and the higher SBRR threshold are real money for small pubs in England. A lot of that is down to the campaigning by licensees who wrote to their MPs this year.

But almost everything else in the Budget costs you. Duty goes up in February and wages go up in April. VAT and employer NI haven’t moved. For a typical wet-led local, the rates saving and the wage rise roughly cancel each other out, and the duty rise comes on top. The BII’s sums say much the same.

For the free house there’s one more point. The duty rise lands on 1 February and the wage rise on 1 April. In between, you’ll get a new rates bill that should be lower. Don’t wait until spring to reprice. Look at your margins in January, decide where the 2p a pint and the 50p an hour are going, and check your new rates bill the day it arrives.

The next fight is VAT, and it’s still worth having.

Sources (17)

1. HM Treasury, “Budget to move power and money…”, 31 Jul 2026 (Budget date): https://www.gov.uk/government/news/budget-to-move-power-and-money-out-of-westminster-and-into-every-postcode-around-britain
2. House of Commons Library, “Autumn Budget 2026: A summary”, 29 Oct 2026: https://commonslibrary.parliament.uk/research-briefings/cbp-12252/
3. GOV.UK, “8/2026: Details of the Budget package and the multipliers for 2027/2028”, Oct 2026: https://www.gov.uk/government/publications/82026-details-of-the-budget-package-and-the-multipliers-for-20272028/82026-details-of-the-budget-package-and-the-multipliers-for-20272028
4. GOV.UK, “Budget 2026: Annex A: rates and allowances”, 28 Oct 2026: https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances
5. HMRC, “Alcohol Duty uprating and Small Producer Relief changes”, 28 Oct 2026: https://www.gov.uk/government/publications/changes-to-alcohol-duty-rates-from-1-february-2027/alcohol-duty-uprating-and-small-producer-relief-changes
6. HM Treasury, Budget 2026 policy costings: https://assets.publishing.service.gov.uk/media/6ae1883fe4367e5c8b0467df/AB26_Policy_Costing.pdf
7. GOV.UK, “LPC recommendations take the National Living Wage to £13.21”, Oct 2026: https://www.gov.uk/government/news/lpc-recommendations-take-the-national-living-wage-to-1321
8. BCP Council, “Important changes to business rates in 2026” (2026/27 multipliers, revaluation): https://www.bcpcouncil.gov.uk/business/business-rates/important-changes-to-business-rates-in-2026
9. BBC News, “Pubs to get support package after business rates backlash”, Jan 2026: https://www.bbc.co.uk/news/articles/c78vqj99168o
10. UKHospitality, “Hospitality business rates reform ‘unravelling’” (pre-January 2026 analysis): https://www.ukhospitality.org.uk/hospitality-business-rates-reform-unravelling-with-urgent-action-needed/
11. UKHospitality, “UKHospitality responds to the Budget”, 28 Oct 2026: https://www.ukhospitality.org.uk/ukhospitality-responds-to-the-budget-2026/
12. BBPA, “Budget 2026 Reaction”, 28 Oct 2026: https://www.beerandpub.com/news-insights-research/news/budget-2026-reaction/
13. CAMRA, “CAMRA reacts to UK Government’s Budget”, 28 Oct 2026: https://camra.org.uk/media-centre/press-releases/camra-reacts-to-uk-governments-budget-93861
14. BII, “BII members disappointed as budget fails to deliver”, 28 Oct 2026: https://bii.org/bii-members-disappointed-as-budget-fails-to-deliver/
15. SIBA, “Budget response: Chancellor makes big changes for small beer” (quotes Red Book 3.29 and 6.228), 28 Oct 2026: https://siba.co.uk/2026/10/28/budget-response-chancellor-makes-big-changes-for-small-beer/
16. The Morning Advertiser, Autumn Budget 2026 live blog, 28 Oct 2026: https://www.morningadvertiser.co.uk/Article/2026/10/28/what-did-the-chancellor-announce-for-pubs-in-the-2026-autumn-budget/
17. The Morning Advertiser, “BBPA urges beer duty freeze to protect pub jobs”, 24 Sep 2026: https://www.morningadvertiser.co.uk/Article/2026/09/24/bbpa-urges-beer-duty-freeze-to-protect-pub-jobs/