Andy Burnham has announced a 20% business rates cut for pubs and music venues, with online marketplace sellers and vape shops facing a tax clampdown.
The 20% cut will benefit nearly 32,000 pubs, clubs and live music venues across England, saving the typical pub an estimated £1,100 in the next financial year, in a support package worth £100m, according to the Treasury. It will not be available to the “very largest live music venues”, with details to be set out in the Budget in autumn.
The 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”.
“The government will also 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 Treasury said.
A consultation is underway on extending VAT rules for online marketplaces to clamp down on UK third-party sellers. The aim is to “make online marketplaces more responsible for preventing non-compliant sellers from avoiding their tax obligations”. Revenue raised is to go into “improvements to the business rates system”.
Burnham, who signalled his intention to cut rates for pubs and music venues before his appointment as prime minister on Monday, 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.”
Newly appointed Chancellor John Healey said: “Pubs, clubs and live music venues are at the heart of communities across the UK. They help make a place what we love. They bring people together, support local jobs and help keep high streets and town centres busy – which is why we will back them all the way.
“We are determined to bring hope back, give businesses the support they need and generate growth in every postcode.”
The 20% cut comes on top of a 15% reduction for pubs and live music venues announced by former Chancellor Rachel Reeves in January.
BRC CEO Helen Dickinson said: “We welcome any action by the prime minister to support Britain’s long-suffering high streets and today’s announcement is a clear indication that the business rates system is broken.
“For retailers, the challenge is clear to see – the industry accounts for 5% of the economy but pays over 20% of the total business rates bill, holding back investment, jobs, and growth. The priority must now be reducing the overall burden on all retail and hospitality businesses to support the investment and jobs needed to revitalise our high streets and keep prices down for customers.”
British Beer and Pub Association CEO Emma McClarkin said: “For years and years, pubs have paid a disproportionately higher rate which has ground down their ability to keep the doors open, so we’re delighted that after working with Andy Burnham’s team prior to his election as Labour Party leader, he has swiftly acted on our concerns and provided new backing to our nation’s pubs as he promised.
“We now look forward to working with government to deliver permanent business rates reform so we can keep the pub in its rightful place; at the heart of our communities.”
Alex Probyn of tax firm Ryan said: “The headline 20% discount only tells part of the story. Taken together with the support already announced earlier this year, this represents a significant package.
“It’s also welcome that the government has stepped away from funding the policy through higher business rates on warehouses,” Probyn added.
“Most distribution warehouses support manufacturers, Supermarkets and wider UK supply chains rather than online-only retail, and have already seen substantial increases in business rates over the last two revaluation cycles. Avoiding further tax increases on a sector operating on tight margins reduces the risk of higher costs ultimately feeding through to consumers.”
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