Healey's first Budget lifts business rates relief threshold, raises machine games duty to 25%

Mixed · 2In his first Budget, Chancellor John Healey raised the threshold at which small firms start paying business rates from £12,000 to £18,000. 1 2 Centre · 1Tapered relief will now start from £21,000, up from £15,000, according to the Evening Standard. 2 Mixed · 2Healey said 70,000 more businesses would be taken out of business rates altogether, meaning half of shops, restaurants and gyms would pay none; the Treasury said this included a further 3,500 pubs, 3,900 restaurants, 2,200 cafes and 1,700 hairdressers and beauty salons. 1 2

Mixed · 2Other businesses in these sectors will have their rates frozen in real terms for two years (2027-28 and 2028-29, for qualifying properties in England), and around 110,000 firms will see bills fall next year, the Evening Standard reported. 1 2 Mixed · 2To pay for this, machine games duty on games with stakes over £1 will rise from 20% to 25% from April next year. 2 1 Mixed · 2Betting firms had feared a rise to 40%, so the increase was smaller than expected and listed gambling shares rose. 1 2

Mixed · 2The outlets differ on the size of the share moves: City A.M. said Entain rose more than 6% and Rank nearly 5%, while the Evening Standard said Rank was up 11% and Entain 5%. 1 2 Mixed · 2The Budget also makes online marketplaces such as Amazon and eBay responsible for collecting VAT on sales by sellers using their platforms; for UK sellers this applies where they make more than £90,000 of sales through a platform, from October next year. 1 2 Right · 1City A.M. said earlier reports suggested the online measure would raise about £1bn, and that it replaces a warehouse tax rise that was ruled out before the Budget after criticism from retail bosses, including John Lewis's. 1

Centre · 1The government also said it would keep exploring how the business rates system could better target online retailers. 2 Centre · 1Entain called the duty rise "another disappointing decision", said it would cost about £25 million a year, and that its chief executive Stella David said it would push more people into the illegal market; Entain also said shop closures and cost cutting would fully mitigate the hit by the end of 2028. 2 Right · 1The rise follows gambling tax increases in last year's Budget; Evoke said it closed 270 betting shops in the past year and Flutter plans about 1,400 job cuts across the UK and Ireland, and BGC-commissioned EY modelling estimated that doubling the duty could put almost 1,500 betting shops and 34 casinos at risk. 1

Right · 1A later City A.M. piece reported that the gambling industry called the move a 'jobs killer'. 3