Beyond the headlines: What the new government’s first tax announcements mean for your business

The new government has already made a number of tax-related announcements, with changes to VAT on domestic electricity and business rates making the headlines during the Prime Minister’s first week in office.

But while the news has generated plenty of discussion, what do these announcements actually mean for business owners?

Here’s a closer look.

VAT on domestic electricity falls to 0%

From 1st October 2026, the government has announced that VAT on domestic electricity bills will temporarily reduce from 5% to 0%.

Households are expected to benefit from lower electricity bills while the temporary measure is in place.

For most businesses, however, the impact is expected to be much more limited.

Although widely reported, the change is designed to support domestic energy users rather than the majority of businesses. While some charities and smaller organisations that qualify for domestic energy VAT relief may benefit, most VAT-registered businesses are unlikely to see a direct impact on their energy bills.

If you’re unsure whether your organisation qualifies for any of these reliefs, it’s worth seeking professional advice to help you understand exactly what applies to your circumstances.

Business rates support for selected sectors

The government has also announced a 20% reduction in business rates for eligible pubs, social clubs and live music venues from April 2027.

The measure follows earlier business rates support announced this year and is intended to provide additional help for eligible venues.

However, the reduction is targeted at specific types of businesses rather than applying across the board, meaning many organisations will not qualify for the new relief.

Further details, including eligibility criteria, are expected to be confirmed at the Autumn Budget.

The bigger picture

While these announcements are significant for those directly affected, they are relatively targeted measures rather than widespread business tax reform.

For many businesses, the bigger question is what comes next.

The Autumn Budget is likely to provide greater clarity on the government’s longer-term tax strategy, including potential changes that could affect businesses more broadly.

In the meantime, it’s sensible to avoid making decisions based solely on early announcements and instead keep a close eye on further developments.

Need help understanding what applies to your business?

Tax changes don’t affect every business in the same way, and the headlines don’t always tell the full story.

If you’re unsure whether these announcements could impact your business, or you’d like to discuss how upcoming tax changes may affect your plans, get in touch with our tax and accounting team.