Business Rates Cut for Pubs, Clubs and Live Music Venues From April 2027

Pubs, social clubs and live music venues across England will receive a 20% cut to their business rates bills from April 2027, Prime Minister Andy Burnham announced on 23 July 2026. The measure covers nearly 32,000 properties and is estimated to be worth around £100 million a year. A typical pub stands to save approximately £1,100 in the 2027/28 financial year.

The announcement also confirmed that the government will consult on measures to make online marketplaces more responsible for preventing VAT non-compliance by sellers operating on their platforms. Revenue from that work is intended to be reinvested in improvements to the business rates system more broadly, with further detail to be set out at the Budget.

This is not the first rates intervention for hospitality and live music. In January 2026, the government announced a 15% relief off 2026/27 bills for pubs and live music venues, with bills frozen in real terms for a further two years after that. The new 20% cut from April 2027 comes on top of that existing support, it does not replace the 15% relief, which applies to the current financial year.

Separately, at Budget 2025, then Chancellor Rachel Reeves cut business rates multipliers by 5p for over 750,000 retail, hospitality and leisure properties. That was funded by a higher multiplier applied to the most expensive 1% of commercial properties. The government also announced £4.3 billion in transitional relief at the same Budget to limit bill increases at the 2026 revaluation, capping rises at 15% for most businesses, or £800 for the smallest.

The Business Rates System

Business rates formally the non-domestic rate are a property tax levied on most commercial premises. They are calculated using a property's rateable value, set at revaluation by the Valuation Office Agency, multiplied by a pence in the pound rate set annually by the government. For years, hospitality and live music sectors have argued the system bears disproportionately on bricks and mortar businesses competing against online rivals with lower property costs.

The government says the 20% cut will be fully funded through two routes. The first is a review of reliefs currently given to businesses it describes as not making a positive contribution to local communities, with vape shops cited explicitly in the announcement. No further detail on which businesses would lose relief, or by how much, has yet been published.

The second funding source relates to a separate policy, extending VAT liability to online marketplaces for sales made by UK based businesses through their platforms.

Online Marketplace VAT Consultation

A consultation published on 23 June 2026 by HMRC and HM Treasury, open until 18 August 2026, proposes making online marketplaces responsible for collecting and remitting VAT on behalf of UK businesses selling goods through their platforms. Under current rules, this liability already applies to overseas sellers, the proposal extends it domestically.

According to the consultation document, HMRC estimates there are tens of thousands of businesses trading through online marketplaces in the UK that are not meeting their VAT obligations. Online sales currently represent 28% of all retail sales, up from 5% in 2008. The government's stated aim is to level the playing field between compliant high street businesses and online sellers avoiding their tax obligations.

The 20% cut applies to England only. Business rates are a devolved matter, Scotland, Wales and Northern Ireland each operate their own systems. The very largest live music venues are explicitly excluded from the new discount, though the threshold for what constitutes "very largest" has not yet been defined, the government says details will be set out at the Budget.

The new discount applies from the start of the 2027/28 financial year, April 2027. It sits alongside, rather than replacing, any existing support measures already in place for the current year.

Today's announcement is presented as one part of a longer process. The government has committed to returning to broader reform of the business rates system including Small Business Rates Relief at a future Budget. No date has been set for that review. The Chancellor of the Exchequer, John Healey, confirmed the government intends to set out further details of the wider reform programme at the Budget.

For a pub, social club or live music venue in England that pays business rates, the 20% cut from April 2027 represents a direct reduction in one of the major fixed costs of running a physical premises. On the government's own estimate of a £1,100 saving for a typical pub, it is a meaningful but not transformative figure, one that sits alongside, rather than replacing, the structural challenges the sector has faced in recent years.

The funding mechanism, particularly the reliance on revenue from the online marketplace VAT consultation is not yet settled. The consultation is still open, the policy design is not finalised, and no legislation has been introduced. The government has committed that the package will be fully funded, but the precise mechanism for doing so will depend on decisions taken after August 2026.

The broader business rates reform the government has promised, covering Small Business Rates Relief and the structure of the system itself remains for a future Budget. What has been announced today is targeted relief for a specific category of premises, not a root and branch overhaul.