Subscribe to our newsletter to receive business tips, learn about new funding programmes, join upcoming events, take e-learning courses, and more.
Take the first step to successfully starting and growing your business.
Join for free)
Posted: Fri 24th Jul 2026
6 min read
Britain's 32,000 pubs, clubs and music venues will receive a 20% cut to their business rates from next April, while online sellers who meet their tax obligations will finally see action against rivals who undercut them by dodging VAT.
The moves, announced by Andy Burnham in his first major business statement since taking office, represent a victory for Enterprise Nation and other business groups that have campaigned for a crackdown on marketplace tax avoidance.
Polly Dhaliwal, chief operating officer at Enterprise Nation, said:
"Anyone who has built a business selling online knows how it feels to be undercut by sellers who dodge their tax. We joined marketplaces and business groups in calling for exactly this change."
The business rates cut will save a typical pub £1,100 annually and comes on top of a 15% relief already in place for 2026-27. The Treasury said the £100 million annual cost will be funded by increasing rates on gambling arcades and vape shops, businesses it said make "no positive contribution to local communities".
The VAT enforcement measures may prove more significant for smaller enterprises. Under the proposals, online marketplaces will become responsible for collecting VAT from sellers who trade through their platforms but fail to register.
The change targets a problem that has plagued legitimate online traders for years – competitors who gain an unfair price advantage by operating below HMRC's radar. Revenue raised will be reinvested in improving the business rates system.
Crucially for micro-businesses, the new rules would only apply to sellers with an annual turnover above £90,000 on a platform. Individuals selling second-hand items remain out of scope entirely.
Chancellor John Healey told business leaders on Thursday he was "just as concerned about the cost of business as I am about the cost of living", adding: "My message to British businesses is quite simple: I will back you as your chancellor."
Andy described the measures as an attempt to "protect working class culture" and told publicans, "the cavalry is coming".
"For too long, governments have stood by while cherished venues have disappeared from our local high streets," the Prime Minister said. "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."
The announcement came during the PM's first week in Downing Street, following earlier cost-saving measures including a £2 bus fare cap in England and a VAT cut on household electricity bills.
The announcement drew cautiously optimistic responses from Enterprise Nation members, though some called for more ambitious reform.
A poll in our weekly newsletter revealed 78% of small business readers were either optimistic about the new Prime Minister’s appointment or happy to defer their judgment, with only 18% seeing the change of leader as a negative move.
Jarmila Yu, a small business consultant, said:
"Hopefully, this is just the start. Bringing forward tax cuts and positive incentives will help open the economy, seeing hiring and jobs flowing again."
But Ian Stirling, founder of consultancy Objectives Reached, argued that piecemeal changes miss the point.
"Reform of business rates is way overdue," he said. "Tax out-of-town shopping on the same basis as the high street. Stop taxing manufacturing sites for improvements they make. Even if you do 100 tweaks, you will still have the same issues."
Enterprise Nation member Jill Poet struck a diplomatic note, suggesting the government deserves time to assess the full scale of problems inherited from the previous administration.
"These two measures send a very clear message that [the Prime Minister] intends to support businesses and that support might be sector-specific according to circumstances," she said. "Just the beginning, but important messages."
The government has opened a consultation on the VAT enforcement measures, running until August 18. Online sellers are urged to respond; officials have indicated that direct testimony from affected businesses carries significant weight in policy design.
Wider reform of business rates, including Small Business Rates Relief, will be addressed at the autumn Budget. That is when decisions affecting the smallest firms will be made.
For now, publicans and venue operators should review how current multipliers apply to their properties and factor the April 2027 cut into their financial planning. Online sellers who trade fairly should make their voices heard before the consultation closes.
Polly said:
"The reform only works for small firms if it is shaped by the people who trade there every day."
We give small businesses a voice – in the media and in Westminster. See our latest press releases, policy insights and how we're championing small firms. Visit the media and policy centre
