The Chancellor delivered the Budget on 28 October 2026. For hospitality, the headline is good news on business rates and a significant wage cost from April. Most other measures matter more to owners personally than to the business. Here is what you need to know, and what to do about it.
Want the number for your own venue? Run our Budget 2026 calculator. It takes two minutes and nothing you type leaves the page.
Business rates: the main win
In England, every hospitality, retail and leisure property will see its business rates frozen in real terms, reduced, or cut to zero. Bills for qualifying properties are capped at inflation in 2027/28 and 2028/29.
The 20% rates cut for pubs, social clubs and all but the largest live music venues, announced in July, is confirmed. On top of this year's 15%, that takes their relief to 35% from 1 April 2027. Small Business Rates Relief for hospitality, retail and leisure now gives full relief up to £18,000 rateable value, tapering to £21,000, which takes around 70,000 more businesses out of rates altogether. The Treasury expects half of all hospitality, retail and leisure properties to pay no business rates.
There is a catch. Part of the cost is funded by extending the 1p supplement introduced with this year's transitional relief scheme for a further two years. Check your position site by site before assuming a saving.
Scotland, Wales and Northern Ireland receive funding to match these measures, but it is for each devolved government to decide how to use it.
Wages: the main cost
From 1 April 2027, the National Living Wage rises 3.9% to £13.21 an hour, around 50p an hour more than today. The 18 to 20 rate rises to £11.27.
To put it in context: a site running 1,000 hours a week at or near the living wage will pay over £30,000 a year more once employer NIC and pension are included. That figure is before holiday pay accrual, and before the pressure to maintain pay differentials for supervisors and senior kitchen roles. The time to build this into your 2027 budget is now, not March.
Drinks: duty rises again
Alcohol duty rises in line with RPI from 1 February 2027. There is no freeze. Small brewers and cider makers get £10 million of extra relief, which may soften some craft prices, but expect supplier price letters in January and push back on anything above the duty itself.
Energy: little for hospitality
The energy measures are aimed at households and electricity-intensive industry. There is no direct support for restaurants, bars or hotels. Procurement and usage remain the levers you control.
Costs and supply chain
The 5p fuel duty cut is extended for six months, and the planned increase is deferred to July 2027. This should help keep delivery surcharges in check. Tariffs are also removed on more than 100 imported products. Both help at the margin, but neither changes the bigger picture.
Hotels: the visitor levy
Local Strategic Authorities will gain the power to introduce an Overnight Visitor Levy. If you operate rooms, watch your local mayor's plans closely. A levy would affect your pricing, your booking platforms and your guest communications.
Owners: the measures to watch
From April 2027, tax on property and savings income rises by two percentage points across all bands. If you own your premises personally and charge rent to your operating company, that rent will be taxed more heavily. Now is the time to review the structure.
The rules on company distributions are being modernised to stop profits being extracted at lower tax rates. The government says genuine commercial transactions and family succession will be protected, but the detail is still to come. Do not put any new profit extraction planning in place until it is published.
A new Founders Relief will offer a 10% Capital Gains Tax rate on up to £10 million of lifetime gains for founders of high-growth, innovative companies. Whether hospitality groups qualify will depend on the eligibility rules.
Corporation tax is unchanged.
People and growth
Employee share schemes are being expanded. They are a real tool for retaining head chefs, general managers and operations leaders.
Visa salary requirements are changing to help employers recruit. This may help with chef hiring once the detail is known.
The trading allowance triples to £3,000, and statutory parental pay is being extended to around 160,000 more parents.
The British Business Bank is receiving more capital, with a focus on finance for smaller firms. This is worth knowing if you are planning an opening or refurbishment.
From October 2027, online marketplaces will collect VAT on qualifying sales. This matters if you sell retail products through them.
What the Budget did not change
Employer NIC stays at 15%, with no new relief. There is no cut to the VAT rate for hospitality, and nothing on tronc. We are working through the full Budget documents and will update this page.
What to do now
- Rebudget 2027 labour at £13.21 an hour, including on-costs and pay differentials.
- Check your business rates position for each site, including relief eligibility and the 1p supplement.
- Review any property you hold personally and rent to your business.
- If you operate rooms, follow your local authority's position on the visitor levy.
- Speak to us before making any dividend or profit extraction decisions.
For the whole picture on one page, read our Budget 2026 summary for operators, put together with Ops Club.
We are discussing the Budget at the Ops Club webinar on 29 October, Budget 2026: Implications for Hospitality and the Night-Time Economy, with the Institute of Hospitality and the NTIA.
Talk to us
We are hospitality people first. If you want to know what Budget 2026 means for your sites, your people and your numbers, get in touch with your WS contact or email info@williamsstanley.co.
Tom Stanley
Founder and CEO