Night-time economy operators across the UK are bracing for a severe financial setback in April 2026, as government business rates reforms will abolish the current 40% Hospitality, Leisure and Night-Time Relief (RHL) and introduce a new structure that, in many cases, will significantly increase costs rather than reduce them.
While official government statements suggest the reforms will create “permanently lower rates,” the figures emerging from affected businesses indicate otherwise. Hundreds of late-night venues—including pubs, bars, clubs, grassroots music venues and late-opening restaurants—are expected to see substantial rises in their yearly rates bills. For many, this is viewed as a covert form of taxation that threatens to dismantle the night-time industry.
The venues most exposed are those in urban centres, particularly nightclubs and music spaces. With the sector already shrinking by 28% in recent years, further closures would deal a damaging blow to cultural life, local communities and regional economies.
At present, businesses receive 40% relief on their rates. From 2026, this support disappears and will be replaced by revised multipliers that fail to compensate for the removal of relief. As a result, sharp rises are expected. A small bar with a rateable value of £25,000 will see its annual bill increase from £7,200 to £9,550. A mid-sized late-night venue valued at £60,000 will see its rates jump from £17,280 to £25,800. Grassroots music venues or nightclubs valued at £100,000 will rise from £28,800 to £43,000. Larger city-centre clubs valued at £300,000 will rise from £86,400 to £129,000, and major flagship venues valued at £650,000 will face an increase from £187,200 to £330,200.
“These aren’t marginal increases—they’re closure-level numbers,” said Michael Kill, CEO of the Night-Time Industries Association (NTIA). “This reform has been presented as a permanent tax cut, but for most night-time venues it is the exact opposite. The removal of 40% relief wipes out any benefit from reduced multipliers and leaves businesses worse off overnight. Inner-city nightclubs, music venues, and grassroots venues are on the frontline of this attack. With the late-night sector already contracting by 28%, the government is systematically shutting down the late-night economy. This is a hidden tax rise on jobs, culture, and city centre life.”
With more than a million people employed across the night-time sector and billions contributed to the UK economy, industry leaders warn that these reforms risk derailing any prospect of recovery after years of disruption caused by the pandemic, rising energy costs and ongoing cost-of-living pressures. Although the government has committed £4.3bn in transitional support over three years—including £3.2bn in Transitional Relief, £1.3bn for the Expanded Supporting Small Business Scheme and an extension to Small Business Rates Relief for a further three years—Kill cautions that this does not solve the core issue. “Transitional relief softens the landing—it doesn’t change where we land. And where many venues will land is closure,” he said.
Businesses in the sector are calling on the government to maintain or replace the 40% RHL relief beyond 2026 for night-time venues, introduce a dedicated multiplier that reflects the higher costs associated with operating after 9pm, protect grassroots music venues from disproportionate increases, and conduct a full impact assessment before proceeding with the reforms.