The Northern Ireland Executive has paused the planned business rates revaluation following strong opposition from the hospitality sector, after warnings that large increases could push many pubs, hotels and restaurants to breaking point.
Finance Minister John O’Dowd confirmed that the revaluation process, which would have come into effect from 1 April, has been halted. As a result, next year’s business rates will continue to be calculated using current property valuations, meaning any changes to bills are now expected to be far smaller for most businesses.
Why the revaluation was paused
Draft valuations published by Land and Property Services (LPS) last week suggested significant increases for parts of the hospitality industry. Some businesses were facing thousands of pounds in additional annual costs, prompting widespread concern and public criticism.
While defending the principle of revaluation as necessary to maintain fairness within the rates system, Mr O’Dowd said the decision to pause was taken to protect local businesses and allow time for further engagement.
He said he had listened closely to concerns raised by pubs, hotels and hospitality operators, describing them as “the backbone of our local economy”. He added that the pause would create space for discussions aimed at delivering a more balanced and equitable approach.
Hospitality sector welcomes the decision
Hospitality Ulster, which had previously warned that the proposed changes could devastate the industry, welcomed the announcement.
Its chief executive, Colin Neill, said the decision brought relief to businesses already under pressure. He stressed that the sector had never opposed paying its fair share, but argued that the scale and speed of the proposed increases were simply unworkable.
Neill said the organisation now looks forward to working with the Department of Finance to find a solution that supports both public revenue and business sustainability.
Ongoing pressures on pubs and restaurants
Speaking earlier in the week, First Minister Michelle O’Neill acknowledged that many hospitality businesses are already “getting it tight”. Rising inflation, reduced customer numbers since Covid, staff shortages and increasing operating costs have all taken their toll.
For some owners and staff, the prospect of steep rates increases felt like the final straw. The draft valuation list published last week highlighted sharp rises for certain premises, leaving many businesses scrambling to understand how they would absorb the additional cost.
What Reval 2026 involved
The proposed changes stemmed from Reval 2026, a revaluation exercise carried out by Land and Property Services. More than 75,000 non-domestic properties across Northern Ireland were reassessed as part of the process used to calculate annual business rates.
The draft figures showed an 85% increase in the total valuation of hotels and a 47% increase for pubs. LPS said these changes reflected the removal of temporary Covid-related allowances that had been introduced during periods of suppressed trading.
LPS chief executive Sharon Gallagher told a Stormont committee that the process was not about creating winners and losers, but about restoring consistency across the system.
Business owners speak out
For many operators, however, the figures were alarming. Adrian McLaughlin, manager of the Harbour View Hotel in Carnlough, said it would be extremely difficult to absorb the proposed increase.
He explained that while additional sales or cost reductions might once have helped, rising National Insurance contributions, utility bills and supplier costs have left little room to manoeuvre.
At the higher end of the market, Colin Johnston of the Galgorm Collection said his resort’s rates bill was projected to rise from £585,000 to nearly £1.5m. He warned that expecting businesses to manage such increases within weeks was unrealistic and called for transitional relief.
Smaller operators echoed those concerns. Canavan’s Bar in Ballygawley publicly criticised the revaluation on social media, highlighting how such increases would inevitably be passed on to customers through higher prices.
In Belfast, Ryan’s Bar owner Gavin Bates said his business faced an additional £33,000 per year, adding that it had not been budgeted for and could force drink price increases.
Impact on customers and pricing
Although the increases would not have affected every venue, those facing higher bills warned that customers would ultimately feel the impact.
Pearse Deeney, owner of The Bridge House in Park, County Londonderry, said further price rises were being considered despite recent increases linked to supplier costs. He said customers were already fed up and increasingly reluctant to go out.
Other operators warned that raising prices is not a simple solution, with businesses constantly balancing profitability against what customers are willing and able to pay.
What happens next
The pause brings Northern Ireland into contrast with England, where pubs and music venues are set to receive a temporary business rates discount from April following a similar backlash.
For now, hospitality businesses in Northern Ireland have been given breathing space. The focus now shifts to discussions between government and industry on how to deliver a rates system that supports public services without undermining one of the region’s most important sectors.