UK pubs and clubs to get 20% business rates cut
New UK prime minister Andy Burnham plans to slash business rates by 20% for pubs, clubs and live music venues from April 2027.
According to the UK government, the move will benefit nearly 32,000 pubs, clubs and live music venues, saving the typical pub an estimated £1,100 (US$1,470) in the next financial year.
The move follows calls from the hospitality sector to reduce VAT on the industry to 10% and cut tax on employment.
Burnham, who replaced Keir Starmer as prime minister this week (20 July), had previously committed to reducing VAT for hospitality from 20% to 10% but has not yet done so.
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.”
However, the 20% business rates discount will not be available to the largest live music venues, with details to be set out at the next budget this autumn.
The cut to rates comes on top of a 15% relief for pubs and live music venues for 2026/27 announced in January, with bills frozen for a further two years.
The government also plans to “review reliefs for businesses that do not make a positive contribution to local communities” like vape shops, which will be used to fund the discounted business rate.
Call for hospitality-wide cut
The move has been praised by industry bodies including UKHospitality and the Night Time Industries Association (NTIA).
Allen Simpson, chief executive of UKHospitality, said: “This is good news and a welcome first step from a government that understands the value of hospitality to jobs, growth and local communities.”
However, Simpson urged the prime minister to go further and implement a “sector-wide solution” as the current measure will only support a fifth of hospitality jobs.
“The prime minister is right to say this should be just the start,” he continued. “Restaurants are struggling just as much as pubs, while hotels are due to see their business rates bills increase by an average of 110%, the highest in the sector.
“After years of rising costs and tax increases that have hit investment and employment, the industry now needs a meaningful, sector-wide solution. While today’s announcement will provide welcome support for pubs, clubs and live music venues, they only account for around a fifth of hospitality jobs. The rest of the sector now needs to see the same ambition.”
Michael Kill, CEO of the NTIA, welcomed the rates reduction, calling it a “positive outcome with genuine engagement with the sector”.
He added: “The inclusion of clubs alongside pubs and live-music venues is particularly important and demonstrates a broader recognition of the vital economic, cultural and social contribution made by the night-time economy.”
Kill believes the new measure will “shift confidence across the sector” and provide relief to businesses facing increasing costs.
The NTIA also intends to “seek clarity on the proposed exclusion of the largest live music venues and continue to press for the final scheme to provide the broadest possible support”.
Kill concluded: “As the announcement is still developing, the NTIA will review the full policy and eligibility criteria when they are published and assess their likely impact across the sector.”
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