10 March 2017
Prior to the 2017 Spring Budget on 8 March, there was a lot of media attention around the forthcoming revaluation of business property in England from April 2017, which looks likely to substantially increase business rates for a lot of businesses. Hospitality is one of the sectors to be hardest hit, with restaurants and hotels intrinsically linked to bricks and mortar.
The Chancellor took heed of the warnings and delivered certain measures to help soften the blow. The relief specific to hospitality is the introduction of a £1,000 business rate discount for public houses with a rateable value of up to £100,000, for one year from 1 April 2017. This is expected to cover 90% of local pubs. It is subject to state aid limits for businesses with multiple properties.
More generally, the Chancellor announced further support for all businesses as follows:
- Support for small businesses losing Small Business Rate Relief to limit increases in their bills to the greater of £600 or the real terms transitional relief cap for small businesses each year.
- Providing English local authorities with funding to support £300 million of discretionary relief, to allow them to provide support to individual cases in their local area. Pubs and restaurants will be able to apply for a share of the £300m, but it remains to be seen how the process of allocation will actually work in practice – let’s hope bureaucracy doesn’t get in the way!
The Association of Licensed Multiple Retailers (ALMR) has estimated that the above reforms will save the sector over £24m.
- The National Living Wage for workers aged 25 and over will be increased from £7.20 to £7.50 from 1 April 2017. Increases are also being made to the National Minimum wage rates. Clearly this will result in additional wage costs for the sector.
- Beer and cider tax is no longer frozen – the first rise in beer duty for five years, with fears that this could lead to further pub closures.
For more information on how the 2017 Spring Budget may affect you, please contact myself or complete our online contact form. Alternatively, to read more on the Budget announcement, you can download our 2017 Spring Budget Summary.