Prime Minister Andy Burnham announced a new 20% business rates reduction for hospitality venues, describing it as the first step toward restoring hope across the country.
The cut applies to roughly 32,000 pubs, restaurants, hotels and music venues and is projected to save an average pub about £1,100 annually.
Industry leaders welcomed the relief but emphasized that broader tax reforms remain necessary.
Tim Martin, chief executive of Wetherspoons, called the measure a small move in the right direction and noted that hospitality businesses continue to face a significant VAT disadvantage compared with supermarkets, which pay zero VAT on essential food items.
Martin highlighted that the 20% VAT on food and drink in pubs widens the price gap for a pint or meal relative to supermarket prices.
Chef and pub owner Tom Kerridge, who leads a campaign for a 10% hospitality VAT, said the rates cut does not go far enough, adding that a £1,000 annual saving makes little impact on overall profitability.
Hotel proprietor Steve Perez, who operates two hotels with attached pubs and restaurants, reported a 130% increase in business rates and argued that the modest relief does not offset rising costs from national insurance, extended producer responsibility charges and other taxes.
Perez also questioned why restaurants and hotels were excluded from the announcement, noting that many pubs now serve food and provide accommodation.
Iain Hoskins, owner of a pub group in Liverpool, explained that a previous 15% rates cut qualified only one of his five venues because the others did not include the word “pub” in their names, leaving his total rates bill between £200,000 and £300,000.
Hoskins said the new 20% relief helps mitigate past increases but does not fully restore value, emphasizing that the figure remains significant for operators.
The hospitality sector continues to push for a VAT reduction, pointing to Ireland’s 9% rate as a benchmark and recalling Burnham’s earlier support for a lower VAT.
Data released in August 2025 indicated that more than one in four late‑night venues, nearly 800 establishments, have closed since 2020 due to mounting overheads and reduced consumer spending.
The Music Venues Trust described the rates cut as an encouraging first step and pledged to work with the government to ensure all grassroots music venues qualify for relief.
The chief executive of the British Beer and Pub Association welcomed the discount, calling it sorely needed for pubs across England.
Funding for the rates reduction will come from a review of reliefs granted to businesses deemed not to contribute positively to local communities, such as vape shops, and from increased taxes on out‑of‑town warehouses serving large online retailers.
