In support of this, today’s announcement confirmed further extensions to many of the existing packages created to support the hospitality industry, with additional measures introduced to ease the ongoing burden.
Below I have summarised the key announcements and provide my response to each:
Business rates holiday extended to end of June 2021. The 100% reduction in business rates will now continue until the end of June. However, many pubs, bars and restaurants will be unable to open until 21 June under the Government’s current roadmap so, whilst this is welcome, it may not help many of these hospitality businesses to find their way out of rent debt.
Continuation of the reduced VAT rate. The reduced VAT rate for the sector of 5% has been extended until 30 September 2021, with a further interim rate of 12.5% for the six months from end of September to April next year. While this reduction may continue to allow the consumer to pay reduced prices for hospitality products, this is only the case if the business chooses to actually pass this on.
Restart grants available to hospitality businesses. Grants of up to £18,000 have been announced to support hospitality businesses in reopening and, while these will be welcomed, the actual amount available is connected to the rateable value of the property that businesses trade from. As a result, whilst the headlines suggest grants of up to £18,000, the amount could be as low as £8,000 for smaller premises. To be welcomed nonetheless.
Freeze on alcohol duties. Alcohol duties are to be frozen for the second consecutive year. This will hopefully keep the consumer from paying increased prices and incentivise the return to pubs, bars and restaurants once post-Covid opening happens.
Community Ownership Fund introduced. This will allow communities across the UK to invest in and protect what matters most to their community. In many areas of the UK this may well be the village pub or similar hospitality businesses.
We will be providing a detailed summary of today’s announcements in our 2021 Budget Summary tomorrow morning. To receive a copy direct to your inbox, subscribe to our Budget publications here.
The next step
If you would like to discuss the impact of any of today’s announcements on your business, please feel free to contact me, or speak to your usual UHY adviser.