The Welsh Government has announced additional business rates support for pubs, restaurants, cafes, bars and live music venues in Wales after warnings from trade organisations that the removal of a business rate relief scheme in the Welsh Government’s budget for 2026/27 would “sound the death knell for more pubs” and be a “disaster” for the hospitality sector in Wales.

In its final budget, the Welsh Government announced measures including the removal of the 40 per cent Retail, Hospitality and Leisure Relief first introduced during the Covid pandemic.

The removal of the relief meant businesses faced an immediate business rate hike from April.

The plan drew the ire of CAMRA and UKHospitality Cymru who both warned that more pubs and restaurants could fold without support.

UKHospitality Cymru analysis revealed that, when compared to the current financial year, the sector’s business rates bill would increase by £29.4m next year, £40.1m in 2027/28 and £52.6m in 2028/29 without help.

The Welsh Government has now announced an extra £8m funding package that will see around 4,400 hospitality businesses eligible for 15 per cent relief on their rates bills in 2026-27, to “help them through a period of rising costs and changing consumer habits.”

The scheme will use funding from the UK Government but also deploys the Welsh Government’s own funds to extend the range of businesses helped in Wales.

The Welsh Government said that almost half of pubs in Wales already benefit from Small Business Rates Relief, and over a quarter pay no rates at all.

The Welsh Government's permanent reliefs are worth £250m every year.

From April, the multiplier used to work out rates bills will also be reduced for the first time since 2010, and £116m in transitional relief is being provided over two years to help businesses adjust to the revaluation.

Finance Secretary Mark Drakeford said: "Pubs, restaurants, cafes, bars, and live music venues are at the heart of communities across Wales.

“We know they are facing real pressures, from rising costs to changing consumer habits.

“This additional support will help around 4,400 businesses as they adapt to these challenges.

“We have extended this relief to restaurants and cafes, as well as pubs and live music venues, because in towns and high streets across Wales these businesses operate side by side, often in direct competition.

“It makes sense to support them equally.

“This builds on more than £1 billion in temporary rates relief we have provided since 2020, alongside our permanent reliefs worth £250 million every year.

“We will continue to stand behind the hospitality businesses that serve our communities."

Eligible businesses can apply for the relief through their local authority from April 2026.

The relief will apply to properties used mainly for the sale of food and drink to the visiting public, including pubs, restaurants, cafes, bars, and live music venues.

The maximum relief available to any single business is capped at £110,000, to prioritise the available support for independent operators.