A Government proposal to cut business rates by 20% for pubs, clubs and live music venues will provide the nighttime economy with ‘welcome breathing space’, says top Corporate lawyer.
Marti Burgess, a Corporate law expert at Knights, believes that while the proposal, unveiled by Prime Minister Andy Burnham today, will provide some relief to businesses amid ‘significant cost pressures’, more will need to be done to help businesses in the hospitality sector thrive.
Marti’s comments come after Andy Burnham this morning announced pubs, clubs and live music venues will benefit from a will get a 20% cut in business rates from April 2027, saving a typical pub more than £1,000 in tax annually.
Speaking shortly after the proposal was announced, Marti Burgess, Partner at Knights, said:
"The reaction I have seen from hospitality, nightlife and festival operators has been broadly positive.
Business rates relief will provide some welcome breathing space for businesses that continue to face significant cost pressures, helping to protect jobs, safeguard venues and support investment. The measure is particularly important for independent operators, pubs, clubs and grassroots music venues, many of which have been operating on very tight margins.
That said, many in the industry do not view business rates relief as a complete solution. The most consistent ask from hospitality businesses remains a reduction in VAT, with many arguing that the current rate places UK operators at a competitive disadvantage and limits their ability to invest and grow.
In the live music sector, there are also continued calls for targeted support for grassroots music venues, which play an important cultural and economic role but remain under significant financial pressure.
Overall, the rates relief is a positive and welcome step, but many in the sector would see it as the start of a wider package of support rather than the final answer to the challenges facing hospitality and the night-time economy."
Milena Facliano-Padron, a Commercial law specialist at Knights, agrees that the move is an encouraging signal of intent from the Government for its support of the high street, but questions whether the tax relief will go far enough to help businesses amid rising costs.
Milena Falciano-Padron, Commercial Partner at Knights, said:
"The proposal does not currently include restaurants and other hospitality and leisure facilities. The hospitality sector has been particularly hit over recent years by the rising costs of employment, energy and supplies at a time when customer footfall has reduced due to individuals and families feeling the pinch.
This rate cut could be an indication that Burnham does understand the importance of the hospitality sector and the key part that it plays in employment and driving the economy forwards, but many in the hospitality and leisure sector will undoubtedly be frustrated that this does not go far enough or come quickly enough.
Time will only tell if this will deliver the much-needed boost to the hospitality and leisure sector."