England’s hospitality businesses set to reinvest £47.2m following business rates cut

New money.co.uk business loans research has revealed the real-terms saving that pubs, live music venues and social clubs across England stand to gain from the government’s new business rates discount — and found that a significant proportion plan to put the money to work rather than simply absorb it.

Analysis of Valuation Office Agency (VOA) data found that the median live music venue qualifying for the relief will save £2,502 a year, while the median pub will save £1,795 and the median social club £936. A survey of 500 hospitality business owners conducted by money.co.uk explored what businesses plan to do with those savings — and found widespread appetite for reinvestment and growth.

The savings

The government’s business rates discount for pubs and live music venues represents one of the most meaningful reductions in business costs for the hospitality sector in recent years. For many qualifying businesses, the relief amounts to the equivalent of several months’ worth of energy bills or a part-time member of staff.

There are approximately 39,500 pubs in England, with a median rateable value of £23,500. After applying the relevant business rates multiplier and the 20% discount, the median pub will pay £5,835 in business rates this year — saving £1,795 compared to what they would otherwise owe. For live music venues and nightclubs meeting the qualifying criteria, the median saving is higher at £2,502 a year. Social clubs, of which there are around 9,450 in England, will save a median of £936.

What businesses plan to do with the money

66% of hospitality business owners surveyed said they consider the saving to be very or fairly significant for their business.

When asked what they would do with the money, 57% of respondents said they would reinvest it in the business. Among those planning to reinvest, business expansion was the most popular use, ahead of new equipment and marketing. 31% said they would save the money as a cash buffer, providing greater financial resilience, while 22% plan to use it to pay down existing debt.

The boost to borrowing confidence

Beyond the direct saving, the research suggests the relief could unlock broader investment activity across the sector. 43% of hospitality business owners said that a business rates cut would make them more likely to borrow money to grow their business — with 11% saying “yes, definitely” and a further 32% saying “yes, possibly”.

11% of respondents said they would specifically use the savings as a deposit to take out a business loan and invest more than the rates relief alone would allow — suggesting the cut could act as a catalyst for wider capital investment across the hospitality sector.

The barriers to finance

Despite this appetite for growth, many hospitality businesses have historically struggled to access or feel confident about finance. 51% of business owners said they had previously missed out on a growth opportunity because they couldn’t access finance or didn’t feel confident about borrowing.

The biggest barrier cited was concern about taking on debt, followed by weak cash flow/uncertainty about taking on repayments and worrying about being approved due to credit checks . These findings suggest that for many businesses, the challenge is not simply the cost of borrowing, but uncertainty about the process and their likelihood of being approved — barriers that, with the right support, are surmountable.