BHA welcomes Osborne's decision on annual investment allowance
The British Hospitality Association (BHA) has welcomed Chancellor George Osborne's decision to uprate the annual investment allowance for plant and machinery in his Autumn Statement.
The allowance has been increased 10-fold from £25,000 to £250,000.
BHA deputy chief executive Martin Couchman (pictured) said: "The allowance is a key element in the refurbishment and extension of existing hotels. Before the Statement, we urged him to increase this allowance and we welcome his initiative.
Other measures welcomed by the association included the reduction of corporation tax from 22% to 21% in April 2014 and the scrapping of the 3p per litre fuel duty.
"Fuel costs are a big item in domestic holidays, particularly for those travelling to far-off rural areas," Couchman said.
Meanwhile, Simon Wilkinson, chief executive of restaurant chain La Tasca, also welcomed the scrapping of the planned 3p rise in fuel duty, but indicated he would have preferred a cut: "As well as buying better-quality food products we have had to absorb fuel cost increases, food price increases and annual wage bill increases, so a cut to fuel duty would have been very welcome," he said.
"We won't pass those costs on to our customers as the market is so competitive and we need to ensure we are perceived as giving great value, which, to me, means the right price when judged against the quality of product and service received."
Steven Henderson, managing director, Beacon Purchasing, said: "The Chancellor's Autumn Statement was a mix of good and bad news. The continued downgrading of UK growth rates is a worry for us all and it becomes increasingly confusing to get to the real deficit and borrowing figures. Beacon's customers are representative of SMEs across the country and we feel the Government has missed an opportunity to help these businesses by not choosing this time to adopt the BHA's 5% VAT on tourism proposals. We are, however, encouraged by the BHA's news yesterday that the Treasury is at least taking its proposal seriously, so we will wait eagerly for news from the spring Budget instead. We would also have hoped to see more progress on the Government's new business bank proposals.
"On a more positive note, we are encouraged by the announcement that the 3p per litre fuel duty rise has been cancelled. This is good news for our suppliers' distribution costs and avoids one inflationary impact on the prices our customers pay. We are also pleased to see a large increase in capital allowances for SMEs. At a time when we are seeing more of our customers thinking about investing in their businesses, this will be welcome news."
Osborne brings in extra measures to help business >>
By Neil Gerrard
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