Sadiq Khan set to rake in £1million from London pubs amid business rates raid

More than a third of business rates collected in London flow directly to the Greater London Authority rather than individual boroughs, meaning the Mayor’s administration benefits from higher valuations.

The Chancellor has announced limited support for pubs affected by wider business‑rates changes, but this relief does not apply to the London‑specific supplement.

Pub landlords are also facing higher employer National Insurance contributions and minimum wage rises introduced in the October 2024 Budget.

Conservative analysis suggests 147 pubs, clubs and bars will be drawn into the Crossrail levy for the first time in 2026, while a further 681 establishments are expected to see annual increases of more than £500.

The threshold for paying the supplement has risen from £75,000 to £92,000 to reflect the revaluation, although no additional transitional relief is available for venues that remain liable.

The Two Chairman pub in Westminster, where Rachel Reeves celebrated her Budget in November, reflects the scale of the change.

Its rateable value is set to rise from £99,000 in 2023 to £144,000 in 2026, resulting in an additional £900 annual charge under the supplement.

The levy is calculated by multiplying a premises’ estimated rental value by 2p, meaning higher‑valued properties face proportionally larger bills.

The Conservatives have accused Sadiq Khan of “punishing pubs” with rising charges on top of what they describe as significant increases in business rates.

David Simmonds, the shadow communities minister, said: “More than 100 pubs have been pulled into scope this year and more than 650 face rises of more than £500 each, with some bills climbing by many thousands of pounds while the Government’s business‑rates relief will not apply to Khan’s surcharges.”

He added: “Rachel Reeves and Sadiq Khan have worked hand‑in‑hand to botch up the business‑rates system – this is what happens with Labour in power.”

Mr Simmonds said Labour’s approach was “sending businesses to the wall, destroying jobs and sending prices up for consumers”.

The Conservatives have said they would abolish business rates for thousands of high‑street firms under an alternative policy.

A spokesman for the Mayor of London described the Conservative claims as “misleading” and said the number of pubs paying the supplement would fall under the new system.

“Under the changes, fewer pubs will now be paying the Crossrail Business Rates Supplement, with around 280 pubs that were previously paying the supplement no longer liable from 2026–27,” the spokesman said.

City Hall said pubs and hospitality venues remain “a vital part of London’s social and economic life”, and noted that around 90 per cent of business premises across the capital are exempt from paying the supplement.

Lockdown‑era reliefs, currently set at 40 per cent, will be withdrawn in April alongside the revaluation changes, which are expected to increase rateable values for many properties across London.