Positive News For Hospitality From Budget Announcement Yesterday
There has been a positive reaction in hospitality to the budget announced yesterday. The hospitality sector received the good news of an extension to the business rates holiday through to the end of June as well as news of a new restart grant up to £18,000 which will be introduced from next month.
VAT applied to food both eat-in and takeaway will remain at 5% for a further six months until the 30th September. The same applies to accommodation and attractions. After this date the rate will rise to 12.5% for a further six months.
Alcohol duty will be frozen for a further year. Businesses will be expected to start contributing 10% of employees’ wages towards the furlough scheme from July, and then 20% in August and September.
Chancellor Sunak said in his speech:
“We’re going long, extending our support well beyond the end of the roadmap to accommodate even the most cautious view about the time it might take to exit the restrictions.”
The government is doubling incentive payments to businesses to £3,000 for all new apprentice hires of any age, alongside investing £126m in traineeships. Bounceback and Coronavirus Business Interruption Loan schemes will be replaced with a new recovery loan scheme. Businesses of any size can apply for loans from £25,000 up to £10m through to the end of this year, and the government will provide a guarantee to lenders of up to 80%.
From April 2021 this will cut companies’ tax bill by 25p for every pound they invest in new equipment, which Sunak described as “the biggest business tax cut in modern British history”.
Matthew Brend, Director at Brend Group (Brend Hotels) commented on Twitter:
“Considering the level of borrowing, @RishiSunak has again shown his support to hospitality with the announced VAT cut extension, rates holiday & other measures. He had us sweating for a minute, but he’s come through with some much-needed support to help the industry rebuild.”
What do you think of the budget? Let us know.