The latest budget was probably one of the most hotly anticipated and here we outline what was a hit and what was a miss for hospitality:
- BUSINESS RATES HOLIDAY UNTIL JUNE – The 100% business rates holiday has been extended for three months to June. It will then be reduced by two-thirds for the remainder of the financial year, equating to 75% relief over the next financial year.
- VAT EXTENDED FOR SIX MONTHS – The reduced rate of 5% for hospitality businesses has been extended to the end of September. It will then increase to 12.5% for six months, with the relief ending in April 2022.
- FURLOUGH EXTENDED UNTIL END OF SEPTEMBER – The furlough scheme is being extended until the end of September, with employees receiving 80% of salary and employers expected to put in 10% from July and 20% from August. It is also believed the Government still intends to introduce a Job Retention Bonus scheme when furlough ends.
- £5BN OF NEW GRANTS – The Chancellor has set aside a £5bn pot of grants to help businesses restart after lockdown. The grants will be up to £18,000 for each hospitality property, based on its rateable value.
- £126M RECRUITMENT INVESTMENT & APPRENTICESHIP SCHEME DOUBLEDIncentive payments for hiring new apprentices are being doubled to £3,000. A further £126m will be invested to triple the number of new traineeships.
- ALCOHOL DUTY FROZEN – Planned increases on duties on beer, cider, spirits and wine – as well as fuel – will be cancelled.
- 130% INVESTMENT RELIEF – A two year ‘super-deduction’ to incentivise business investment will mean businesses can reduce their taxable income by 130% of the amount they invest in plant and machinery, helping to regenerate hard hit high streets and local communities.
- £150M COMMUNITY FUND – A £150m fund was announced to help communities buy their local pub [as well as theatres, shops or local sports clubs] rather than risk losing it.
- RECOVERY LOAN SCHEME – A recovery loan scheme will replace bounce back loans and the Coronavirus Business Interruption Loan Scheme [CBILS]. The new scheme will run until the end of the year, whereby 80% of the loans will be guaranteed by the Government for a value of £25,000 to £10m.
- OFFSET LOSSES AGAINST TAX BILLS – Companies will be able to offset losses against their tax bills going back up to three years, allowing them to claim additional refunds of up to £760,000.
- BUSINESS RATES CAP – The relief will be capped at £2 million meaning larger businesses will not receive the full benefit. UKH has raised this as a priority with the Treasury.
- NO SIGN OF MAKING VAT CUT PERMANANENT – A permanent reduced rate of VAT for hospitality would redress the unfair tax imbalance that businesses have faced for too long.
- NO PERMANENT REDUCED RATE FOR ON-TRADE ALCOHOL – Duty on alcohol sold in pubs has been a topic for debate even prior to COVID-19, placing it at a competitive disadvantage against cheap, supermarket alcohol. UKH will be lobbying the Government to urge it to consider a separate, reduced rate for on-trade alcohol.
- NO RENT PROTECTION – Rules preventing landlords from throwing out tenants for non-payment of rent expire this month, which is considered a major oversight and threatens thousands of business owners across the country.
There were many wins in the Budget, but there are still major loopholes that need addressing so that hospitality businesses of all shapes and sizes have a chance to survive this pandemic.
However, with the vaccine rollout continuing to gather momentum and a clear roadmap to reopening, there’s definitely lots of reasons to be optimistic that “Tomorrow will be a better day”, as the late Captain Sir Tom Moore so eloquently said.