Introduction The pathogenesis of COVID-19 depends on the interplay between host characteristics, viral characteristics and contextual factors. Here, we compare COVID-19 disease severity between hospitalized patients in Belgium infected with the SARS-CoV-2 variant B.1.1.7 and those infected with previously circulating strains. Methods The study is conducted within a causal framework to study the severity of SARS-CoV-2 variants by merging surveillance registries in Belgium. Infection with SARS-CoV-2 B.1.1.7 (‘exposed’) was compared to infection with previously circulating strains (‘unexposed’) in terms of the manifestation of severe COVID-19, intensive care unit (ICU) admission, or in-hospital mortality. The exposed and unexposed group were matched based on the hospital and the mean ICU occupancy rate during the patient’s hospital stay. Other variables identified as confounders in a Directed Acyclic Graph (DAG) were adjusted for using regression analysis. Sensitivity analyses were performed to assess the influence of selection bias, vaccination rollout, and unmeasured confounding. Results We observed no difference between the exposed and unexposed group in severe COVID-19 disease or in-hospital mortality (RR = 1.15, 95% CI [0.93–1.38] and RR = 0.92, 95% CI [0.62–1.23], respectively). The estimated standardized risk to be admitted in ICU was significantly higher (RR = 1.36, 95% CI [1.03–1.68]) when infected with the B.1.1.7 variant. An age-stratified analysis showed that among the younger age group (≤65 years), the SARS-CoV-2 variant B.1.1.7 was significantly associated with both severe COVID-19 progression and ICU admission. Conclusion This matched observational cohort study did not find an overall increased risk of severe COVID-19 or death associated with B.1.1.7 infection among patients already hospitalized. There was a significant increased risk to be transferred to ICU when infected with the B.1.1.7 variant, especially among the younger age group. However, potential selection biases advocate for more systematic sequencing of samples from hospitalized COVID-19 patients.