Is a refit worth it? Payback maths before rates relief lands in April 2027

Refits are back in the trade press. Hospitality Week and Chronicle Live reported that Admiral Taverns reopened the Derby in South Shields on 29 October 2026 after a £322,923 investment covering full internal redecoration, new furniture, darts features, outdoor seating and signage. The Hexham Courant reported that Greene King's Bay Horse in Whickham would close from 26 October for a six-figure refurbishment of its bars, dining areas and toilets, aiming to reopen before Christmas. And ahead of its AGM on 30 October, Shepherd Neame announced a £15 million investment over three years in a new, smaller brewery in Faversham. That last one is brewery capital, not a pub refit, but it shows the same question at group level: what does this money earn back, and when?

Most of us are not spending £300,000. The maths is the same at £30,000. Before we sign a quote, we want a payback number we believe, and we want it built without leaning on a rates change that has not landed yet.

What changes in April 2027

The Budget on 28 October 2026 said that in England the extra business rates relief for pubs, social clubs and eligible music venues rises by 20 percentage points, from 15% to 35%, from 1 April 2027. Music venues with a rateable value of £1 million or more stay on 15% and do not get the rise to 35% (Budget 2026, paragraph 6.189; MHCLG 8/2026). It is a relief on the bill, not a cut to the multiplier. For retail, hospitality and leisure properties, the small business rate relief thresholds also rise from 1 April 2027: 100% relief up to £18,000 rateable value, tapering to £21,000 (paragraph 3.22).

This April 2027 rise is England only. We found no matching published scheme for Scotland, Wales or Northern Ireland that lifts pub relief to 35% from April 2027. Restaurants and cafés still get the lower retail, hospitality and leisure multiplier, but the 35% figure is for pubs, social clubs and eligible music venues.

The 2027/28 multipliers are now published. For this worked example we use the small retail, hospitality and leisure multiplier of 39.5p (rateable value under £51,000). The figures are still illustrative, because real bills also depend on transitional relief and other reliefs.

Work the payback step by step

Every £ figure in this example is illustrative. It is a made-up pub, not a forecast. We assume all sales attract 20% VAT, so gross takings divided by 1.20 give net sales.

The quote:

1. Refit works: £60,000.
2. Closed for two weeks. Usual contribution (net sales less product costs) is £4,000 a week, so lost contribution is 2 × £4,000 = £8,000.
3. Total cost of the project: £60,000 + £8,000 = £68,000.

The upside we expect:

1. Extra gross takings after reopening: £2,400 a week.
2. Net of VAT: £2,400 ÷ 1.20 = £2,000.
3. Gross profit at 70%: £2,000 × 0.70 = £1,400.
4. Extra labour to serve the extra trade: £300 a week.
5. Extra contribution: £1,400 minus £300 = £1,100 a week.

Payback:

1. £68,000 ÷ £1,100 = 61.8 weeks, so about 62 weeks.
2. 62 ÷ 52 = about 1.2 years.

Test the weaker case

A refit rarely delivers the full uplift from week one. We rerun it with half the extra takings:

1. Extra gross: £2,400 × 0.5 = £1,200 a week.
2. Net: £1,200 ÷ 1.20 = £1,000.
3. Gross profit: £1,000 × 0.70 = £700.
4. Labour: if we keep the same extra £300, contribution is £700 minus £300 = £400 a week.
5. Payback: £68,000 ÷ £400 = 170 weeks, about 3.3 years.

Halving the uplift almost triples the payback time, because the extra labour does not halve with it. That is the line to stress test with your team.

Keep rates relief in its own column

Now the April 2027 relief, for an illustrative English pub:

1. Rateable value: £40,000.
2. 2027/28 small retail, hospitality and leisure multiplier: 39.5p. Bill before reliefs: £40,000 × 0.395 = £15,800.
3. At 15% relief: £15,800 × 0.15 = £2,370 off.
4. At 35% relief: £15,800 × 0.35 = £5,530 off.
5. Extra saving: £5,530 minus £2,370 = £3,160 a year, or £3,160 ÷ 52 = about £61 a week.

Real bills depend on transitional relief and other reliefs, so check your own bill with your council or rates adviser. The point stands: about £61 a week (illustrative) is welcome, but it will not rescue a refit that only works on paper. The pub gets that relief whether it refits or not, so we do not count it as refit payback.

Before you sign

• Quote is fixed price, with what is excluded written down
• Closure weeks agreed and lost contribution costed
• Uplift built from your own covers and spend, not hope
• Weaker case worked at half the uplift
• Extra labour, energy and maintenance included
• Rates relief kept separate from the payback figure
• Rates adviser asked whether the works could change your rateable value
• Reopening plan ready, with events booked like the Derby's launch week

Your action this week

Take the last refit quote you received, or the one you are thinking about, and run both the full and half uplift paybacks on one page using the steps above. If the half case runs past your lease or loan term, go back to the supplier before you go back to the bank.