Prime Minister Andy Burnham has announced a 20% business rates cut for pubs and social clubs from April 2027, with eligible live music venues also covered by the £100 million-a-year package. The announcement comes as the Government prepares to outline a wider business rates reform later this year.
Nearly 32,000 properties across England are expected to benefit from the new cuts, saving a typical pub an estimated £1,100 during the 2027/28 financial year. The largest live music venues will be excluded, with detailed eligibility criteria due to be set out at the Autumn Budget.
The measure builds on a 15% relief for pubs and live music venues in 2026/27, announced in January, and on a pledge to keep their bills frozen in real terms for a further two years.
The Government said the latest package would be fully funded by reviewing reliefs for businesses it says do not add value to local communities, citing vape shops as an example.
It also plans to strengthen tax compliance among sellers using online marketplaces. A consultation is examining whether marketplaces should take greater responsibility for preventing sellers from avoiding VAT obligations, with any additional revenue reinvested in the business rates system.
Burnham previously pledged to raise taxes on out-of-town warehouses for online giants such as Amazon to help pay for cuts to rates for hospitality firms.
He said: “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.”
Retail awaits Small Business Rates Relief changes
The immediate cut is confined to hospitality and live music businesses, but the Government has confirmed that wider business rates reform, including changes to Small Business Rates Relief, will return at the Autumn Budget.
Modelling by global tax firm Ryan estimates that implementing those proposals in full would cost about £880 million annually and remove more than 140,000 additional small business premises from the business rates system.
Retailers have continued to press for broader action. The British Retail Consortium said the sector employs 2.8 million people and has faced an additional £6.5 billion in employment costs since 2024, alongside higher business rates and other operating expenses.
Alex Probyn, Practice Leader for Europe and Asia-Pacific Property Tax at Ryan, said: “The risk is that business rates reform becomes an exercise in redistribution rather than reduction when the yield is already far too high and the highest of any developed economy.
“Reducing liabilities for one part of the economy by increasing them for another does not reduce the overall tax burden. It simply shifts it.”
The cuts form part of a bid from Burnham to focus on reducing costs for the public and communities since entering Downing Street on Monday, which has also seen him announce plans to remove VAT from electricity bills and reinstate a £2 cap on single bus fares across England.
The 20% cut comes on top of the 15% relief announced in January.
Chancellor of the Exchequer John Healey said: “We are determined to bring hope back, give businesses the support they need and generate growth in every postcode.”