ANDY Burnham slashing business rates bills for pubs, clubs and live music venues is “a step in the right direction” but it’s “only one part of the challenge facing the hospitality sector”, pub landlords, accountants and financial experts have claimed.
The new Prime Minister will make the changes across England from April next year, it has been announced.
New business rate cuts will benefit nearly 32,000 pubs, clubs and live music venues, and save the typical pub an estimated £1,100 in the next financial year.
The government claims that today’s changes will be fully funded, including through reviewing reliefs for businesses that do not make a positive contribution to local communities, such as vape shops.
It also said it will crack down on businesses that sell through online marketplaces but do not comply with their tax obligations, putting them at an unfair advantage over businesses that play by the rules.
The Government is consulting on measures to make online marketplaces more responsible for preventing non-compliant sellers from avoiding their tax obligations and further detail will be set out in due course. Revenue raised from these reforms will be reinvested in improvements to the business rates system.
This comes as Burnham earlier this week announced a tax cut to remove VAT from domestic electricity bills from October and a cap on single bus tickets at £2.
Step in the right direction
Prime Minister Andy Burnham said: “For too long, governments have stood by while cherished venues have disappeared from our local high streets. So today I am changing that.
“This government will back the businesses that people want to see in their communities. I said I would protect pubs and local high streets – the beating heart of our communities – and that’s what we will do. What we’re announcing today is just the start as we work to bring back hope across the country.”
Jo Dearsley, Proprietor of The Six Bells in Newdigate, Surrey, said pubs like hers need the whole tax structure to be reformed.
She added: “This announcement is a genuinely welcome step in the right direction. Pubs are far more than businesses serving food and drink – they are the heart of our communities, bringing people together in a world that is becoming increasingly digital and disconnected. Every pound that can be reinvested into these venues helps protect local jobs, supports independent operators and ensures these important community spaces remain open for future generations.
“That said, business rates are only one part of the challenge facing the hospitality sector. The ongoing VAT burden continues to place enormous pressure on pubs already dealing with rising employment, energy and supply costs. If we truly want Britain’s pubs to thrive rather than simply survive, this announcement should be the start of a broader conversation about creating a fairer tax environment that allows the sector to invest, grow and continue playing its vital role at the centre of community life.”
Michelle Lawson, Director at Lawson Financial, said she worries that this is not fully costed.
She added: “Unfunded giveaways can be a worry as they all get paid from somewhere. Whilst anything is welcomed, it’s not going to save the hospitality industry just like that.
“The damage on rising rates, goods, wages and the general cost of living are all a compounded problem. Sorting the root cause will always solve the issues at a higher level.”
Challenge
Harvey Dhillon, Founder & CEO at Zmartly, pointed out it will be nearly a year before this is actually implemented.
He added: “Good news for pubs, yes, but it is a round on the house that will not be poured until April 2027. The 20 per cent rates cut for nearly 32,000 pubs, clubs and live music venues in England is worth an estimated £1,100 to the typical pub, about £21 a week.
“It is not yet law, the very largest live music venues are excluded, and the detail is held back for the Budget. On the funding, it is paid for on paper. The question is who pays. Chasing online sellers who do not pay the tax they owe is fair: they undercut everyone who plays by the rules.
“But reviewing reliefs for businesses like vape shops means one high street trader pays for another. So the first week points the right way: pubs and venues needed the help, but an announcement is not delivery. My advice to any pub is simple: budget on the 15 per cent relief announced in January for your 2026/27 bill. Treat the 20 per cent as a promise, not money in the till.”
Harry Goodliffe, Director at HTG Mortgages, said pubs and music venues desperately need help.
He added: “It’s great to see the high street finally getting attention after years. Pubs and music venues deserve support after years of pressure, but Britain’s biggest problem is still weak growth and high taxes.
“If one business gets relief only because another pays more, we’re simply moving money around. The real test of Burnham’s agenda will be whether it makes it easier to start, grow and invest in businesses across the economy, not just a chosen few.”
Photo by Miles Burke on Unsplash.
