Business rate relief extended for hospitality in Autumn Statement
Business rates relief for hospitality will be extended for a further 12-months, chancellor Jeremy Hunt announced in the Autumn Statement today.
The 75% discount for retail, hospitality, and leisure businesses, introduced in the wake of the pandemic, will be extended despite the chancellor warning it was "not possible to continue with temporary support measures forever".
The discount allows businesses to claim relief up to £110,000, saving the average pub £12,800 a year.
The chancellor said the £4.3b tax cut recognises "the role of pubs and high street shops in our communities". Hunt also froze the small business multiplier for a further year, however the standard business multiplier will increase by 6.4%.
UKHospitality chief executive Kate Nicholls said: "The chancellor has brought forward a significant package of business rates measures that will help hospitality businesses across the country. UKHospitality led the calls for government to extend relief and take action on the multiplier and I'm delighted the chancellor has acted on our asks.
"The decision to freeze the small business multiplier will help those most vulnerable keep the lights on. However, the standard multiplier rising by 6.4% will see businesses representing almost two-thirds of the sector's trade still facing a £150m rates hike. This will only put more pressure on consumer prices and inflation, at a time when businesses are still grappling with high costs of energy, food, drink and wages."
Hunt also confirmed a freeze on alcohol duty and told the House of Commons: "For many, going to the pub has become more expensive. I'm confirming our Brexit pubs guarantee, that the duty on a pint is always lower than in the shops, and I've decided to freeze all alcohol duty until August 1 next year."
The freeze was welcomed by the UK Spirits Alliance and distiller Stephen Russell said: "We raise a toast to the chancellor today for his decision to freeze duty and thank him for listening to thousands of distillers, landlords and bar owners up and down the UK."
As anticipated the chancellor confirmed the National Living Wage would increase by almost 10% rising from £10.42 to £11.44 from 1 April 2024, with eligibility extended to 21- and 22-year-olds for the first time. The increase marks the largest ever increase in the National Living Wage.
Hunt said: "This delivers our manifesto commitment to eliminate low pay altogether."
UKHospitality chief executive Kate Nicholls had warned the increase would have "significant knock-on impacts" on businesses.
Introducing his Autumn Statement the chancellor had said: "We take decisions for the long term. Our choice is not big government, high spending and high tax, because we know that leads to less growth, not more. We want to reduce debt, cut taxes and reward work."
He also announced reforms to the planning system aimed at increasing the speed of processing major business applications. If these new timelines are met local authorities will be able to recover the full costs of processing the application, but if they are not fees will be refunded to the applicant automatically.
The Autumn Statement also revealed that National Insurance would be cut by 2%, from 12% to 10%, a tax reduction of £450 for an employee on the average salary of £35,000. The cut will be fast-tracked and come into effect from 6 January 2024.
Hunt also abolished Class 2 National Insurance for the self employed and confirmed that the introduction of 30-hours of free childcare for parents of one- and two-year-olds will begin to be rolled out in April.
Once again the chancellor made no mention of a reduction in VAT for hospitality, despite industry campaigns. Calls for VAT free shopping for overseas visitors were also not addressed within the chancellor's speech to the House of Commons.
