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UK: Prime Minister Andy Burnham has said the government will cut business rates for pubs, social clubs and live music venues in England by 20 per cent from April 2027.
According to the government’s announcement, the businesses that are eligible for the business rates cut are:
- Pubs
- Social clubs
- Live music venues
Businesses not mentioned include:
- Hotels
- Restaurants
- Cafes
- Cinemas
According to the government, the business rates cut will benefit almost 32,000 pubs, clubs and live music venues, with the typical pub expected to save an estimated £1,100 in the next financial year. The support will be targeted so that the largest live music venues are excluded.
It builds on the 15 per cent business rates relief for pubs and live music venues announced by Rachel Reeves earlier this year, as well as a two-year freeze on bills in real terms.
The announcement has drawn mixed reactions, with many hospitality business owners, operators, and service providers calling on the Prime Minster to extend the relief package.
Neal Jones, president EMEA, Marriott International:
“It is encouraging that Andy Burnham has announced the business rate reduction for pubs, clubs and live music venues. It is a positive step that recognises the vital role hospitality businesses play in driving economic growth, supporting local communities and creating jobs. But if we are serious about unlocking the full potential of hospitality, hotels must be part of this.
“Earlier this month we were encouraged to hear Andy Burnham express his support for UK Hospitality’s call for a reduction in VAT for the whole of the sector from 20 per cent to 10 per cent. A lower VAT rate would provide a meaningful boost for the sector, stimulate further investment and help hospitality continue to grow and create jobs and opportunities in communities across the country. We hope his next step is to follow through on this promise.”
Tim Rumney, CEO, BWH Hotels GB:
“Andy Burnham’s commitment to easing cost pressures for businesses is welcome and the commitment to wider reform is encouraging. But these measures alone will make no difference to the challenges facing independent hotels, making their continued exclusion from business rates relief all the more disappointing.
“Hospitality doesn’t operate in silos. Hotels, pubs, clubs and music venues all rely on one another to create thriving destinations, so selectively supporting one part of the sector risks weakening the wider ecosystem. What the hospitality sector needs is meaningful support that improves cash flow, encourages investment and helps businesses grow. A reduction in VAT for hospitality would be a simpler, more effective and immediate way to protect jobs, support investment and keep prices competitive.”
Adam Flint, chair, Bristol Hoteliers Association:
“The business rates reduction is an encouraging move from Mr Burnham so soon into his time as Prime Minister, but in reality, it barely scratches the surface of what is needed. What will make a real, positive, difference is to cut the rate of VAT, something the sector has been calling for ever since the rate returned to 20 per cent post-pandemic.
“While we cannot control rising costs in a lot of areas, one thing for sure is a reduction in VAT will encourage consumer sales and bring prices down to a more reasonable level, as many other countries in Europe operate with right now. We hope that the VAT’s The Problem campaign, spearheaded by Tom Kerridge, will continue and that Mr Burnham and his cabinet listen and respond, for the benefit of all our businesses.”
Frazer Callingham, managing director, Starboard Hotels:
“Hotels, as do all other hospitality businesses, face the same cost increases across every area of the business as the pub industry and have done so for several years post-pandemic. In the last three years alone, there has been a double figure increase in employment costs (National Minimum Wage and NIC Taxation), rise in the general cost of sales, pass through price increases from all other suppliers and middle line expenditure has also risen.
“We are the last line of business to bear the burden of any changes before the end consumer, our guests. And while we have the ability to flex our pricing unlike other industries, our business is demand driven. We can only pass on cost changes at a price the customer is willing to pay.”
Champa Magesh, managing director, Access Hospitality:
“A large part of England’s hospitality sector will not benefit from today’s announcement. The food services and accommodation sector contributes 2.8 per cent of the UK’s total economic output, yet the government has explicitly named hotels, guest houses, and boarding houses as excluded from this relief. This means that businesses like country inns or boutique hotels with public bars and restaurants do not qualify, highlighting a significant flaw in current plans. As it stands, eligibility is decided based on what a business is called, rather than what they actually do.
“The UK hotel market alone is set to generate £22.9 billion in revenue this year, with more than half (57 per cent) of that being made up of independent operators However, it’s independent operators who stand to lose the most from this exclusion.”
Highlights:
- England’s government will introduce a 20 per cent business rates cut for pubs, social clubs and live music venues from April 2027, excluding hotels and restaurants.
- The business rates reduction will benefit almost 32,000 pubs, clubs and live music venues, with the typical pub expected to save around £1,100.
- Hotels, restaurants, cafes and cinemas are not included in the announced business rates relief package, prompting calls for wider hospitality support.
- Companies including Marriott International, BWH Hotels GB and the Bristol Hoteliers Association have urged the government to extend relief measures across the wider sector.
- The new policy builds on existing 15 per cent business rates relief for pubs and live music venues, alongside a two-year freeze on bills in real terms.
