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‘Disastrous’ Welsh Budget lands hospitality with £122m business rates bill

January 21, 2026

The Welsh Government’s decision to end current business rates relief, exclude hospitality from reform and provide inadequate transitional relief will punish small hospitality venues.

UKHospitality Cymru has slammed the Welsh Budget as ‘disastrous’ for Welsh hospitality, with the sector being hit with a mammoth £122m hike to its business rates bills over three years.

The trade body said the continued exclusion of hospitality from business rates reform will accelerate high street decline, job cuts and business closures.

Rates increases

Its analysis reveals that, when compared to the current financial year, the sector’s business rates bill will increase by:

  1. 1

    2026/27

    £112.5m – an increase of £29.4m (35%), compared to 2025/26.

  2. 2

    2027/28

    £123.2m – an increase of £40.1m (48%), compared to 2025/26.

  3. 3

    2028/29

    £135.7m – an increase of £52.6m (63%), compared to 2025/26.

  4. 4

    Total increase:

    £122.1 million

The increases are driven by the removal of current business rates relief, hospitality being excluded from business rates reform and an inadequate package of transitional relief. This is compounded by rateable values increasing by 23% on average for the sector.

David Chapman, Executive Director, UKHospitality Cymru

David Chapman, Executive Director of UKHospitality Cymru, said: “This Budget is disastrous for Welsh hospitality. The scale of these shattering increases will be unsustainable for many businesses and the decision to exclude hospitality from any support will only drive further job losses and businesses closures.

“Communities and their local hospitality venues will be the ones bearing the brunt of an unjust system that has long been broken, despite promises to reform it for the better.

“The system is in dire need of reform and the Welsh Government’s efforts barely touch the side of what is required.

“It is now vital that the Welsh Government commits to using, in full, any additional funds flowing from additional support in England to support hospitality businesses.

“All political parties seem to agree that hospitality is unfairly treated by the business rates system, yet still nothing happens. That must change.”

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