Budget 2017: Business rate relief announced in spring budget
Hospitality companies can expect some relief from the increased financial burden expected in the forthcoming rise in business rates, Chancellor Philip Hammond announced in today's budget.
In today's hour-long speech that was said "to lay the foundations for a stronger, fairer, more global Britain as the country prepares for Brexit", Hammond highlighted that 90% of all pubs would receive a £1,000 discount on business rate bills.
He also pledged that other companies that face losing the small business rate relief will not see their business rates bill increase by more than £50 per month.
In what was the last budget to be held in the spring, the Chancellor announced that the UK economy is expected to grow by 2%, rather than 1.4% as was previously expected.
Next year, growth is forecast to slow to 1.6%, before increasing to 1.7%, then 1.9% and back to 2% in 2021.
Meanwhile, inflation is expected to hit a peak of 2.4% this year, according to figures from the Office for Budget Responsibility. It will then fall to 2.3% and 2% respectively in 2018 and 2019.
Key features of the spring 2017 budget impacting the hospitality industry:
Business rates
The Chancellor has responded to the deep concerns among businesses with regard to the forthcoming increase in business rates. While he said he was unable to abolish the rates, which raised £25b a year, he unveiled three measures to help businesses that are expected to suffer from the increased financial burden:
1. All businesses that will lose the small business rate relief will not see their business rates bill increase by more than £50 per month next year.
2. Around 90% of all pubs will receive a £1,000 discount on business rate bills.
3. Local authorities will be awarded a £300m fund to provide discretionary relief for hard-hit businesses.
Technical education
T-Levels, covering technical and practical subjects, will replace 13,000 qualifications with just 15. The number of hours training for 16-19-year-old technical students will increase by over 50%, supported by £500m. The new qualifications will include a three-month work placement for every student.
National insurance
There will be a 1% rise in national insurance for the self-employed to 10% from April 2018. There will then be a further rise to 11% in 2019. The increases will raise £145m net per year, which amounts to around 60p per week per self-employed person.
Cigarettes and alcohol
A new minimum excise duty on cigarettes will be introduced, based on a price of £7.35 per pack of cigarettes.
There will be no further increase to a previously announced increase in duty of alcohol along the lines of inflation. As a result, duty on alcohol will increase on beer and cider by 2p and 1p respectively, while it will rise by 36p on a bottle of Scotch whisky and 10p on a bottle of wine. The new prices will come into force on 13 March.
Sugar levy
The sugar tax announced in last year's budget will raise less than forecast as a result of producers taking more sugar out of drinks. The Education Department will still receive the £1b earmarked from the levy.
Childcare and returnships
Working parents with three- and four-year-olds will get free childcare entitlement doubled to 30 hours a week.
There will also be £5m available to the public and private sector, helping people back into employment after a career break.
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