To ‘protect jobs and livelihoods’, was the aim of Rishi Sunak’s Budget today, but what does it mean for Hospitality?
We have waded through the information to bring you a snapshot of the information you really need to know.
The Chancellor has announced additional funding for Covid 19 support which will be essential in ensuring a fast return to hospitality. Support includes:
- An extra £1.65 billion cash injection to ensure the Covid-19 vaccination roll-out in England continues to be a success.
- £28 million to increase the UK’s capacity for vaccine testing, support for clinical trials and improve the UK’s ability to rapidly acquire samples of new variants of COVID-19.
- Extending £500 Test and Trace support payments in England until the summer.
The end of the furlough system has been a worry on the minds of many people. The inevitable increase in unemployment that will follow it is something everyone wants to avoid. Today it was announced that Furlough will remain in place until September. And there is even better news for those that are self-employed. The SEISS will remain in place alongside furlough and will remain at 80%. As well as this, a further 600,000 will be eligible due to the filling of the 2019/2020 tax year.
There is also great news for anyone looking to buy a house:
- An extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September will support the housing market and protect and create jobs.
- A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.
But what about Hospitality?
- Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
- 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief. This has been confirmed at zero for the first three months and then at one third for the following nine months.
- Alcohol Duty will be frozen.
- £150m to help communities take over pubs in danger of closing.
- More than doubling the legal limit for single contactless payments, from £45 to £100
- 90 million funding to support our government-sponsored national museums in England due to the financial impact of Covid-19.
- £300 million for major spectator sports, supporting clubs and governing bodies in England as fans begin to return to stadia.
- Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
- To further support the cashflow of businesses, the government is extending the loss carry back rules worth up to £760,000 per company.
This all sounds incredibly positive. But there are a few things missing from that list that the Hospitality industry was hoping for. This includes a government-backed insurance programme for the hospitality and events industries. A group of 40 cross-party MPs has called for the creation of a scheme to give businesses the confidence to take bookings without fear of cancellation later in the year. The Night-time Industries Association (NTIA) said without it many events will be “needlessly cancelled or postponed until 2022”.
Many were also disappointed that the cut in Hospitality VAT was not extended to alcohol. Many wet-led pubs feel they will hugely struggle without this.
Finally the changes to corporation tax were not as drastic as the press had eluded it, no change for the next two years and then and then the rumoured increase to 25% will come into place, but only for companies with profits above £250,000… If your profits are £50K or less you will stay at 19% and there will be a sliding scale of increases in between these two key amounts.
Pete Warden, Co-Founder of Hospitality Titans and Director at LXA Hospitality is feeling positive about being able to finally put a plan in place for reopening.
“Whilst the Chancellor has stepped up again and delivered a lot of what we were hoping for, will this be enough to save as many businesses as possible and kickstart the hospitality industry recovery? Only time will tell…
Now that we have the roadmap of dates & the clarification on financial support all of our efforts will be focused on reopening our wonderful venues, welcoming our incredible teams back to work & bringing joy and happiness to our much missed guests! I say bring it on!”