The UK government has announced a 20% cut in business rates for pubs, clubs and live music venues in England, effective from April, according to a report by the BBC. The policy, announced by Prime Minister Andy Burnham in his third policy announcement since taking office, is estimated to save firms around £1,100 next year. The cut will cost £100 million and will be funded by a review of tax relief on firms such as vape shops which "do not make a positive contribution to local communities," the government said. Additionally, the government will "crack down" on businesses selling through online marketplaces that "do not comply with their tax obligations."
Policy Details and Eligibility
The 20% discount will apply on top of an existing 15% business rates cut for pubs and music venues that was announced earlier in 2026. However, the new discount will not apply to the "very largest" live music venues. Details about which businesses are eligible will be announced at Chancellor John Healey's first Budget in the autumn. The government expects nearly 32,000 venues to benefit.
| Discount | Scope | Effective Date | Cost / Funding |
|---|---|---|---|
| 20% business rates cut | Pubs, clubs, live music venues (excluding largest) | April (next year) | £100m; funded by review of vape shop tax relief and online marketplace tax compliance |
| Existing 15% business rates cut (announced earlier 2026) | Pubs and music venues | Already in effect | Not specified in source |
Industry Reaction
Hospitality bosses welcomed the support, but some pub owners expressed doubts about sufficiency. Iain Hoskins, owner of Ma Pub Group in Liverpool, told the BBC the relief would help "chip away" at rising costs but questioned how many venues would benefit. He noted his pubs had previously missed out on government support and that "the increases were so huge last year that now we're sort of chipping away at some of those increases."
Steve Perez, founder of soft drinks company Global Brands and an owner of two hotels, said the announcement is "welcome… but this won't make any material difference to any pub."
Allen Simpson, chief executive of UK Hospitality, called the plans "a good start" which "suggests that his affection for hospitality has survived the trip down the M1," but added that it is "not for everybody in hospitality."
Michael Kill, chief executive of the Night Time Industries Association, said the tax break could provide "meaningful relief to businesses facing sustained cost pressures" but noted the sector is waiting for more details and expressed concern about the exclusion of the largest live music venues.
The Federation of Small Businesses (FSB) said Thursday's announcement must be "a downpayment on action that reaches across the small business community." FSB policy chief Tina McKenzie said the plans were encouraging and fix the damage caused by past business rates decisions which are "holding back small business growth and jobs in every postcode."
Broader Context
The change is the latest move in what Burnham hopes will provide "breathing space" for people and businesses. On Tuesday, the government announced a 5% VAT cut on electricity bills and a £2 cap on bus fares in England outside London. Under previous chancellor Rachel Reeves, the government had said last year it would scale back business rate discounts that had been in force since the pandemic and announced that there would be no discount from April this year. That, combined with big upward adjustments to rateable values of pub premises, left landlords with the prospect of much higher rates bills. Following criticism from the hospitality industry, the government cut business rates for pubs and music venues by 15% earlier in 2026.
Next Milestone
Chancellor John Healey is expected to announce eligibility details for the 20% discount at his first Budget in the autumn.
