The Government’s long-awaited Autumn Budget was delivered Wednesday by Chancellor Rachel Reeves, introducing measures that could reshape the outlook for independent restaurants and other hospitality venues. Key reforms to business rates were unveiled, while experts say that rising labour costs and no changes to VAT may place further pressure on the sector.

In her statement to the House of Commons, Chancellor Rachel Reeves pledged permanently lower business-rate multipliers for 750,000 retail, hospitality and leisure properties, describing the move as “designed to support our high streets and level the playing field between small hospitality venues and large commercial or warehouse‑based firms.”

From April 2026, eligible retail, hospitality and leisure properties will benefit from the lower multipliers, intended to reduce the long-term tax burden on small businesses. Transitional relief of 40% (subject to a cash cap per business) will also be available in 2025–26.

At the same time, the National Living Wage is set to rise to £12.71 per hour from April 2026, expected to increase staffing costs for many operators. The standard 20% VAT rate for restaurants, pubs and bars remains unchanged, meaning there is no targeted VAT relief for the sector.

Experts say these combined factors such as higher wage costs, unchanged VAT, and partial business-rate relief could create challenges for smaller, independent venues operating on tight margins. Rising operational costs, including energy and ingredient costs, may lead some restaurants to adjust staffing, opening hours, or menu pricing in the months ahead.

Reacting to the Autumn Budgets announcements, Georgina Pellant, Marketing Manager at York based Italian restaurant Lucia said:

The commitment to lower business-rate multipliers offers a welcome degree of long-term certainty for independent venues.

But with rising labour costs and no relief on VAT, many high-street restaurants are still bracing for a tough few years. We hope policymakers will continue to listen to the challenges faced by hospitality and consider additional support if cost pressures persist.

While the government presents these measures as a boost for high-street hospitality, some experts caution that the sector will need to carefully monitor costs, staffing, and consumer demand over the coming months.


Business-rate relief: Autumn Budget 2025 introduces permanently lower business-rate multipliers for 750,000 retail, hospitality, and leisure properties from April 2026, with transitional 40% relief available in 2025–26.

Labour cost pressures: National Living Wage to rise to £12.71/hr from April 2026, increasing staffing costs for hospitality operators.

VAT unchanged: Standard 20% VAT for restaurants, pubs, and bars remains in place, with no targeted relief for the sector.

Sector warning: Experts caution that rising costs, combined with partial business-rate relief, may put pressure on staffing, pricing, and profitability.