Spring statement: Chancellor brings forward apprenticeship levy reform and digital services tax

13 March 2019 by
Spring statement: Chancellor brings forward apprenticeship levy reform and digital services tax

Chancellor of the Exchequer Philip Hammond has expedited plans announced in his last budget that could help to support the hospitality industry.

In a Spring statement that was light on detail in the wake of potential upheaval caused by Brexit, the chancellor pledged to move forward reforms to apprenticeships announced in Autumn. The move will see the co-investment rate halved from 10% to 5%, and the amount employers can transfer to their supply chains increased to 25%.Worth £700m, the change will now begin in April 2019.

However Hammond was called on to go further by figures in the industry. UKHospitality's Kate Nicholls said: "Commitments to vocational training are welcome, but the sector is facing an acute staff and skills shortage.

"The move to bring forward apprenticeship support for SMEs is positive but we need broader support to ensure we can deliver on apprenticeships as soon as possible."

He also moved forward on calls to create a digital service tax to pool money from online retailers and relieve the strain on high streets caused by business rates, while also reigning in the power of home sharing websites and online travel agents (OTAs). The consultation on details and implementation plans will be brought forward to introduce the levy from 1 April 2020.

Nicholls added: "High streets have been seriously impacted by the ongoing shift to digital businesses and hospitality businesses are no exception. It is most welcome that government is realising that the UK's tax and regulatory environment needs to keep pace with the way the world is changing. In hospitality this is clearly manifested in the relatively unregulated worlds of home-sharing and online travel agents, which are dominated by big companies.

"Commitment to ensure there is more transparency for both businesses and consumers is certainly welcome and we will look forward to engaging with the government to ensure the concerns of our members are heard.

"We also urgently need movement on the long-overdue review of the businesses rates system, to capitalise on the introduction of the Digital Services Tax and make sure the system is fit for purpose in the 21st century."

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