Burnham targets vape shops to fund 20% UK venue tax cut
New UK Prime Minister Andy Burnham is shifting £100m in business taxes from struggling pubs and live music venues to retailers like vape shops in a bid to halt the sector's economic decline.
Pubs, clubs, and live music venues in England will see their business rates fall by 20% next year. The £100m tax break, announced by Prime Minister Andy Burnham, will be funded by reviewing tax reliefs for businesses like vape shops and clamping down on online marketplace tax evasion.
The intervention targets an industry operating on the edge of collapse. Between July 2024 and July 2025, 30 grassroots music venues closed permanently and 48 stopped hosting gigs. Surviving spaces are running on an average profit margin of just 2.5%, with 53.8% reporting zero profit and the sector shedding more than 6,000 jobs annually.
A typical pub will save around £1,100 per year, with roughly 32,000 businesses set to benefit. However, the relief will not extend to the largest music venues, a caveat that industry leaders hope the government will reconsider before the autumn Budget. "Live music is an ecosystem, and we strongly urge the government to reconsider the limit to the eligibility criteria," said Mark Davyd, CEO of the Music Venue Trust.
The rate cut is Burnham's third major economic intervention since taking office earlier this week, following a planned VAT reduction on household electricity bills and a £2 cap on bus fares outside London. By raising the threshold at which business rates apply, the government also intends to exempt many small high-street retailers from the tax entirely.
The rapid policy shifts are actively altering the sector's economic outlook. "This is the third major policy announcement in as many days from the new government. Together, these interventions have undoubtedly begun to shift confidence across the sector," said Michael Kill, CEO of the Night Time Industries Association.
For the broader European market, the survival of the UK's grassroots circuit is crucial, as it serves as the primary training ground for artists who eventually tour the continent. Davyd has called on the devolved governments in Scotland, Wales, and Northern Ireland to match the English funding to ensure a "level playing field of economic conditions for touring across the UK."
Beyond domestic taxes, the industry is now pressuring the new prime minister to resolve prohibitive post-Brexit touring barriers that continue to disrupt cultural and business exchanges with the European Union.
