Budget tax hike puts hundreds of grassroots venues at risk, Government warned

The Labour Government’s first Budget has put hundreds of grassroots music venues in the UK at immediate risk of closure, the sector has warned.

Music Venue Trust (MVT) said the reduction of business rates relief from April 2025 means more than 350 grassroots venues could be shuttered.

The reduction of relief from 75% to 40%, as outlined by Chancellor Rachel Reeves in her first Budget on Wednesday, could cost venues £7m in additional taxes, according to MVT. To put that into perspective, MVT explained that the UK’s 830 grassroots venues returned an entire gross profit of just £2.9m in 2023, while 43% of such venues operated at a loss.

Change could cost 12,000 jobs

MVT said the change will lead to the potential loss of more than 12,000 jobs, over £250m in economic activity and the loss of over 75,000 live music events.

While the Government has promised to deliver a new lower rate of taxes on physical, hospitality and leisure premises from April 2026, MVT said that change could come too late for many venues.

“Changes in April 2026 are to be welcomed, but will be of no use for the hundreds of music venues that are now likely to be lost before this challenge is finally met with a full, long overdue reform,” said MVT chief executive Mark Davyd.

MVT has called on the Government to rethink the “unfair and unreasonable” change or create an emergency fund of up to £7m to assist those venues in danger of closing. A third choice would be that every venue could add 50p to every ticket sold to meet the £7m demand.

Davyd added: “Music Venue Trust believes that ticket prices should be kept accessible and is reluctant to encourage venues to adopt option three. Unless the government is willing to think again, it unfortunately may be the only possible option to stop a complete collapse of live music in our communities.”

National Insurance concern

The Night-Time Industries Association (NTIA) expressed its concerns about other elements of the Budget, including the rise in employer National Insurance Contributions (NIC) to 15% and net increase in alcohol duty. While it welcomed the extension of business rates relief for two years, chief executive Michael Kill is concerned this assistance will be swallowed up by other changes.

Kill added: “This relief will be immediately undercut by increased NIC Employer contributions and thresholds with increased individual employer contributions to businesses, net increase in alcohol duty and overarching workforce increases, although rightly intended to support the workforce, will have severe repercussions for already struggling businesses across the sector.

“This shows an acknowledgement of core businesses within nightlife but lacks consideration for the broader industry outside of bricks and mortar businesses and the vital and diverse role our night-time economy plays within our communities and the UK’s culture and economy.”