At a bistro in Leeds, the owner opens her April 2026 business rates bill and finds a smaller figure than feared, but no mention of energy anywhere on the page. Her electricity contract renewed in June at 27p per kWh, well above pre-2021 levels. She asks her accountant one question: does any scheme actually lower what she pays for gas and power, or only for the building itself? This autumn, the answer is mostly the second.
What changed for hospitality in April 2026
Restaurants in England felt the first effect of a rule change on 1 April 2026, when the long-running discount on business rates stopped applying in its old form. New Retail, Hospitality and Leisure multipliers replaced the annual 40% RHL relief that operators had claimed since the scheme began. A restaurant with a rateable value under £51,000 now sits on a small business RHL multiplier of 38.2p, while one valued between £51,000 and £499,999 sits on a standard RHL multiplier of 43.0p. The old relief carried a £110,000 cash cap per business; the new multiplier does not, since unlike the current 40% relief available to qualifying RHL businesses, there is no cash cap or £110,000 limit on the total amount of reduction in rates a business can receive. Councils are also applying a separate transitional scheme so that nobody absorbs the full revaluation increase in one year, with caps that rise gradually depending on rateable value band.
Who actually qualifies, and who does not
Eligibility depends on how a property is used, not on what sits on the lease. Qualifying businesses are those which provide for the sale or hire of goods, the sale of food & drink, whether for consumption on or off the premises, including pubs and cafes or restaurants. Some service businesses are excluded outright, since banks, estate agents, dentists, vets, solicitors, betting shops and taxi firms do not qualify for the lower multipliers.
A narrower discount sits on top of the multiplier, and it misses most restaurants entirely. On 27 January 2026 the government announced an additional 15% business rates discount for qualifying pubs and live music venues, applied after transitional relief and the new multipliers. Hotels, restaurants and other non-pub hospitality categories fell largely outside the 15% relief. A pub kitchen serving food can claim it; a standalone restaurant next door cannot.
One lever does touch the energy bill directly rather than the rates bill. It sits in the Climate Change Levy, a charge added to every commercial gas and electricity unit. Micro-businesses using less than 33,000 kWh of electricity or 145,000 kWh of gas annually may be exempt from the levy, which removes a small but real line from the bill for the smallest cafés and takeaways.
What the figures show
The rates side of the ledger moved sharply for some operators. VOA data summarised by the House of Commons Library shows rateable values for Public Houses and Pub Restaurants rose by an average of 30% at the 2026 revaluation. Hotels fared worse in cash terms: UKHospitality's modelling shows an average hotel rates bill rising by £205,200 over three years, or 115%, though restaurants and cafés generally saw smaller percentage rises in rateable value. Across the wider sector, UKHospitality estimates the industry faces a cumulative cost increase of over £3.4 billion from April 2025 changes alone.
Energy costs sit separately from all of this, and they have not fallen. UK business electricity in 2026 costs roughly 22p to 30p per kWh for most small and medium firms, with a daily standing charge of around 45p to 65p. For a typical kitchen, that translates into real money: an independent restaurant using 25,000 to 50,000 kWh a year pays roughly £5,800 to £12,000 annually. The Climate Change Levy adds a further charge on top, set at 0.775p per kWh in 2025-26 for businesses that do not qualify for the micro-business exemption.
What comes next
A government trial aimed at the energy side of the problem is already running its course. The scheme runs from May 2025 to March 2026, on a trial basis involving 615 firms, and the government has partnered with UK Hospitality and the Hospitality Sector Council to roll it out, with further details shared through trade bodies rather than a public portal. No scheme has replaced the direct energy subsidies that followed the last crisis. The government rolled out financial relief for businesses through the Energy Bill Relief Scheme from 2022 to 2023, followed by the Energy Bills Discount Scheme from 2023 to 2024, but nothing of that kind has returned since. Meanwhile UKHospitality has called for a permanent lower multiplier for hospitality properties, but as of mid-2026, no structural reform has been legislated beyond the multiplier change already in force.
The trial scheme's results, due once it closes at the end of March 2026, will show whether a wider energy support mechanism follows for restaurants, or whether the rates multiplier and the levy exemption remain the only tools on offer.
Learn more about energy relief
- Important changes to business rates in 2026
- Business Rates – Retail, Hospitality and Leisure Multipliers for 2026/27
- New Government Scheme To Cut Energy Costs for UK Hospitality
