Chancellor reveals relief likely to save hospitality £750m in budget

29 October 2018 by
Chancellor reveals relief likely to save hospitality £750m in budget

Philip Hammond announced a business rates cut of one third for sites with a rateable value of £51,000 or less, in a budget expected to save hospitality businesses £750m.

The business rates cut, which the chancellor said would see savings of up to £8,000 for 90% of independent pubs, shops, restaurants and cafes, will remain in force until the 2021 business rates revaluation.

The policy made up part of his pledge to ‘"reinvigorate the high street". However some expressed concern at his £675m Future High Street Fund, which will help local authorities to turn disused retail spaces into residential properties following a consultation period.

Adam Walford, partner at Howard Kennedy LLP, warned that "if the changes that come from this consultation lead to retail spaces becoming flats and houses, there will be no going back."

Meanwhile the chancellor set out a new levy against internet giants which may level the playing field for the high street. The UK Digital Services Tax will target internet businesses who make more than £500m globally a year with a 2% charge on revenues raised in the UK.

Duties on beer ciders and spirits were frozen - while wine duties will continue to increase. The national living wage will rise from £7.83 to £8.21 in April 2019, while the threshold on personal tax allowance will be raised to £12,500 - a year earlier than expected.

Green policies featured in the budget - but less prominently than originally thought. The chancellor announced a tax on plastics at the point of production and import that contain less than 30% recyclable material.

And while the latte levy - a tax on reusable cups - was brought up, the chancellor said he had decided not to introduce a charge as he had not seen evidence it would see a "decisive shift from disposable to reusable across all beverage types".

He said environment secretary Michael Gove would be looking at alternative measures through a "packaging producer responsibility scheme".

UKHospitality chief executive Kate Nicholls said: "This was a positive budget for hospitality, recognising and acknowledging our core campaigns around employment costs, business rates and digital paying its fair share - together with a positive outcome on excise duty, latte levy and non-residential capex and investment allowances. We estimate the measures announced in the budget as a result of our campaigns are likely to save the trade £750m.

"Hospitality businesses have been devastated by spiralling business rates costs, so steps to address this are welcome. UKHospitality has exhaustively campaigned for support for the sector on business rates, so it positive to see the government listening."

She added: "The Chancellor has taken some positive steps to reassure and support hospitality busigovernment to follow this positive budget with continued support for businesses, as we close in on our withdrawal from the EU."

The decision to freeze beer duty has been welcomed by the Campaign for Real Ale. Responding to the speech, Brigid Simmonds, Chief Executive of British Beer & Pub Association, said: "Pub-goers across the UK will be toasting the Chancellor tonight following his decision to freeze beer duty.

"This early Christmas present will save brewers, pubs and pub-goers £110 million and secure upwards of 3,000 jobs that would have been lost had beer duty gone up.

"Clearly, the Chancellor has listened to the seven in 10 people in the UK who said they'd like to see beer duty cut or frozen in the Budget. Pubs are so important to their local communities and 82% of the beer we drink here is brewed in the UK."

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