Pubs were the big winners of today’s Budget, with alcohol duty frozen and discounted business rates extended.
An increase in the National Living Wage and changes to business rates and revaluation were also some of the key points for the hospitality industry, which Chancellor Philip Hammond said would allow the country to “look forwards not backwards”.
The Office for Budget Responsibility has downgraded its growth forecast for next year to 1.4%, slowing to 1.3% in 2019 and 2020, and then 1.5% in 2021 and 1.6% in 2022.
Key features of the autumn 2017 Budget impacting the hospitality industry:
Business rates and VAT
In an hour-long speech Hammond announced the £1,000 discount on business rate bills for pubs with a rateable value of under £100,000 (believed to apply to 90% of pubs) will be extended to March 2019.
As part of the autumn Budget (previously announced in the spring), it was announced the VAT threshold for small businesses will remain at £85,000 for the next two years.
However, from April 2018 business rates will be calculated using the lower Consumer Price Index (CPI) instead of the Retail Price Index (RPI), “worth £2.3b to business over the next five years”, and future business rate revaluations will take place every three years instead of every five.
National Living Wage
From April 2018, the National Living Wage will increase by 4.4%, from £7.50 to £7.83 an hour.
Alcohol, tobacco and fuel
While duty will be increased on high strength alcohol from 2019, including “white ciders”, duties on other ciders, wines, beers and spirits will be frozen.
Tobacco duty will rise by inflation, plus 2% as planned, with an additional 1% duty increase on hand-rolling tobacco. Fuel duty will also be frozen for another year.
To support the introduction of T-Levels, covering technical and practical subjects, Hammond committed a further £20m to support Further Education colleges preparing for them.
Hammond also announced an investigation will be launched to look at how a tax on single-use plastic items could help reduce waste.
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