Healey raises gambling duty to 25% to fund high street business rates relief

Gambling duty pays for the package

Chancellor John Healey used Wednesday's budget, delivered on 28 October 2026, to announce extra support for Britain's struggling high streets. The package will be partly paid for by a tax rise on gambling, with duty on machine games with stakes above £1 rising from 20% to 25% from April 2027. Investors had feared the rate would be doubled, so the smaller increase brought relief across the sector. Shares in Rank, which owns Mecca Bingo and Grosvenor Casinos, climbed 11% on the FTSE 250, while the Ladbrokes group Entain gained 5%. The extra money is intended to fund a wider extension of business rates support for retail and hospitality firms.

Rates relief for shops and hospitality

The threshold for 100% small business rates relief, aimed at hard-hit retail and hospitality firms, will rise from £12,000 to £18,000. Tapered relief will begin at £21,000 instead of £15,000. Healey said the change would take 70,000 more firms out of business rates altogether. The Treasury also listed the premises that will be exempted from paying business rates.

Pubs3,500

Restaurants3,900

Cafes2,200

Hairdressers and beauty salons1,700

Pubs

3500 premises

Restaurants

3900 premises

Cafes

2200 premises

Hairdressers and beauty salons

1700 premises

Data from the article text

Pubs, restaurants, cafes and hairdressers are among the groups set to benefit, and qualifying English properties will have their real-terms rates bills frozen across 2027-28 and 2028-29. Taken together, the measures will leave about half of retail and leisure firms in England paying no business rates. Around 110,000 bills are set to fall in 2027.

Online sellers and VAT

Healey also turned to online marketplaces, which will be made responsible for collecting VAT owed by retailers selling through their platforms. Platforms already have to account for VAT on goods sold from abroad to British buyers, though some overseas sellers reportedly rely on shell companies to dodge this. From October 2027, marketplaces will also collect VAT on sales by UK businesses that make more than £90,000 of sales through their platforms. The government also said it would keep examining how business rates could bear more heavily on online retailers, while limiting knock-on effects for other shops.

Small traders and rent pressure

Surpreet Suri runs the one shop left from a Birmingham photography business his father started 40 years ago, on Kings Heath High Street. The site gives greater visibility but much higher running costs, and he is now considering moving. Rent, VAT, wages, pensions and energy costs all eat into his earnings, and refilling one professional printer with ink costs about £2,000. Online retailers now account for 28% of UK retail sales, which Suri and other independent owners cite as a further pressure. Suri told Al Jazeera that he lives month to month. Asked about his own pay, he said:

“I pay myself less than the minimum wage”

Community ownership in Dewsbury

Prime Minister Andy Burnham announced a £210mn package in September to bring derelict high street buildings back into use and give communities more control over their high streets. In Dewsbury, West Yorkshire, the Victorian arcade built in 1899 stood empty for about a decade before reopening in September 2026 under community management. It is funded by central and local government and local people rather than a commercial landlord. Manager Jenny Holden-Stokes said most tenants are new to trading or previously worked from home, and that low rents give them room to grow. Arcade chair Jackie Ramsay said it had been hard to win over some locals, and that 5,000 people came on the opening day. She put it this way:

“A lot of people have called it a very expensive white elephant.”

Julian Hindmarsh, a partner at the law firm Howard Kennedy, said such ideas have been talked about for some time without often being carried out, and he set out the conditions for them to work:

“their success often depends on long-term funding and having access to suitable premises, as well having the right local leadership in place.”