Autumn Budget: Relief for hospitality businesses over next 12 months

The Chancellor Rishi Sunak announced a business rates cut for hospitality businesses over the next 12 month in his Autumn budget.

He said: “I’m announcing today, for one year, a new 50% business rates discount for businesses in the retail, hospitality, and leisure sectors.

Pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms.

Any eligible business can claim a discount on their bills of 50%, up to a maximum of £110,000.

That is a business tax cut worth almost £1.7bn.

Together with Small Business Rates Relief, this means that over 90% of all retail, hospitality and leisure businesses will see a discount of at least 50%.

Apart from the Covid reliefs, this is the biggest single-year tax cut to business rates in 30 years.”

Here’s a summary of what else was announced that could affect your hospitality business. 

Increase to national living wage

The Chancellor confirmed that the National Living Wage will rise from £8.91 to £9.50 an hour from 1st April 2022 to those aged 23 and over.

  • National Living Wage for those aged 23 and over: From £8.91 to £9.50 an hour
  • National Minimum Wage for those aged 21-22: From £8.36 to £9.18
  • National Minimum Wage for 18 to 20-year-olds: From £6.56 to £6.83
  • National Minimum Wage for under-18s: From £4.62 to £4.81
  • The Apprentice Rate: From £4.30 to £4.81

Alcohol Tax

  • Rising energy prices and an increased costs for supplies has led to a warning from pubs that higher prices could be expected to be introduced for a pint.
  • Mr Sunak announced an overhaul which he described as “the most radical simplification of alcohol duties for 140 years”, coming into force in February 2023.
  • This will lead to higher-strength drinks going up in price, but lower duty on drinks ranging from sparkling wine to draught beer.
  • Proposals for extending the principle of small brewers relief to include small cider makers and makers of alcoholic drinks with a strength of less than 8%.
  • Sparkling wine producers will now pay the same duty as still wines of equivalent strength.
  • Duty on draught beer and cider will be cut by 5%.

Business Rates

  • Chancellor announced a 50% cut in business rates for hospitality for one year between 2022-23- which is worth £1.7bn – and a change in the business rates multiplier, which will lower business rates bills by just under £1bn a year.
  • Eligible properties will receive 50% relief, up to a £110,000 per business cap.
  • It is a total tax cut of £7bn over five years.
  • From 2023, businesses will also be able to make property improvements, and for 12 months, pay no extra business rates.
  • Rate revaluations will also move to every three years from 2023, and the business rates multiplier will be frozen in 2022-23. 

Fuel duty

  • The chancellor says an increase in fuel duty will be cancelled, saving motorists £8bn over five years.
  • After 12 years of freezing fuel duty it will save the average motorist £1,900.

 Taxation and universal credit

  • Sunak announces that he will cut the taper rate in universal credit from 63p to 55p. This will be worth more than £2bn.
  • The work allowance will be increased by £500.
  • The chancellor says this will be implemented no later than 1 December.
  • Sunak says his “goal” is to reduce taxes by the end of the parliament.
  • He says: “By the end of this parliament I want taxes to be going down, not up.”

For full information on the Autumn Budget and what has been announced, https://www.gov.uk/government/topical-events/autumn-budget-and-spending-review-2021.

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