By Karim Hammam
Chancellor John Healey has announced a package of measures to support Britain’s high streets, financed by increased taxes on gambling machine games and a crackdown on online VAT compliance.
Gambling Duty Increase
From April next year, the duty on machine games with stakes above £1 will rise from 20% to 25%. The increase is smaller than earlier fears of a doubling, prompting a rally in gambling shares. Rank Group, owner of Mecca Bingo and Grosvenor Casinos, rose 11%, while Entain, parent of Ladbrokes, gained 5% in the FTSE 250.
Business Rates Relief Expanded
The threshold for 100% small business rates relief for retail and hospitality firms will increase from £12,000 to £18,000, with tapered relief extended to £21,000 from £15,000. The Treasury says this will exempt an additional 70,000 firms from business rates altogether, including 3,500 pubs, 3,900 restaurants, 2,200 cafes and 1,700 hairdressers and beauty salons. Real-terms business rates bills for qualifying properties in England will be frozen in 2027‑28 and 2028‑29. Overall, half of all retail and leisure firms in England will pay no business rates, and around 110,000 will see property tax bills fall next year.
Online Marketplace VAT Crackdown
To help fund the support, online marketplaces will become responsible for collecting VAT on sales by UK-based retailers that exceed £90,000 annually through their platforms, effective from October next year. The move aims to close a loophole where some foreign firms used shell companies to avoid VAT obligations. The government also said it would explore how the business rates system could better target online retailers to further fund high street support.
Industry Reaction
Entain criticised the machine games duty increase as “another disappointing decision,” estimating an extra £25 million in annual costs. Chief executive Stella David warned that previous tax hikes had already damaged the industry, pushing more customers toward the illegal market. However, Entain said betting shop closures, cost cutting and other plans would fully mitigate the impact by the end of 2028.
