Pubs, hotels, cinemas and gyms across Wales are set to receive a permanent 30% cut in some business rates from April 2027, in a move designed to support local businesses and high streets.
The reduction will apply to small and medium-sized businesses with a rateable value below Β£51,000. It will replace the current temporary 15% relief for hospitality businesses.
How the cut will be funded
The Welsh Government says the change will be paid for through a small increase in rates for properties with the highest values. This includes some hotels, supermarkets and other businesses operating from large sites.
Finance Minister Elin Jones said the increase would amount to around 1p in every Β£1 paid by the largest businesses. Ministers said the approach would ensure local authorities do not receive less funding.
Business rates are collected by the Welsh Government and then redistributed as direct funding to local authorities in Wales.
Businesses welcome help with rising costs
First Minister Rhun ap Iorwerth said the policy was intended to help businesses thrive and bring more vibrancy to Welsh high streets.
Speaking during a visit to the Radyr Tap in Cardiff, he said the change would make a difference to businesses and communities.
Phil Newbould, who runs two pubs, described the cut as helpful, although he said it would amount to a saving of about Β£3,000 a year across his businesses and that more could be done to reduce hospitality costs.
Oliver Banks, owner of Cardiff cafe and wine bar Kindred, said the reduction could provide more room to manage food and drink prices. He said hospitality businesses had already faced higher costs linked to inflation and increases in the minimum wage.
UK Hospitality Cymru welcomed the announcement. Its director, David Chapman, said the sector was dealing with high taxation, energy costs, inflation and increased labour costs, but described the rates cut as the beginnings of a change that could help businesses plan for growth and employment.
The organisation continues to argue that hospitality businesses also need action on VAT, which is controlled by the UK Government.
Different approach from England
The announcement follows a decision in England to introduce a 20% business rates cut for pubs, social clubs and live music venues from April 2027. The Welsh policy covers a wider range of hospitality, accommodation and leisure businesses, including gyms.
