Hospitality sector singled out for Budget relief

Chancellor of the Exchequer Rishi Sunak holds the budget box outside 11 Downing Street in central London ahead of the announcement of the Spring Statement in the House of Commons on 11 March, 2020 in London, England. (Photo by WIktor Szymanowicz/NurPhoto via Getty Images)
  • A raft of measures was outlined today in the Budget to help the UK hospitality sector as it confronts the limitations of COVID-19.
  • Business rates have been slashed to zero for hospitality businesses with as rateable value up to £51k the coming year by the Chancellor in his Budget speech today. A spirits duty rise has been cancelled for the coming year.
  • For pubs and inns, an existing business rate discount of £1000 has been raised to £5000

Meanwhile a predicted rise this year in beer duty has been cancelled, while cider and wine duty have also been frozen for the coming year.

An extension of rural broadband availability was announced with a commitment of £5bn to facilitate gigabit broadband to remote regions and for 4G to reach 95% of the UK in the remainder of this parliament.

However, a 6.2% rise in national living wager in 6 weeks will take effect rising in 2024 to two-thirds of median earning, estimated at a rate of more than £10.50 per hour, placing further pressure on many thousands of UK hospitality operations.

Industries Reaction

Commenting on the Chancellor’s announcement for a freeze to wine and spirit duty Miles Beale, chief executive of the Wine and Spirit Trade Association, said: “The decision to freeze wine and spirit duty is welcome for British business, pubs and the wider hospitality trade. While he has not cut duty, it is reassuring to see that in his first Budget as Chancellor, Rishi Sunak MP, has taken steps to address the UK’s excessively high duty rates.

“He has shown he is in touch with British consumers – from all walks of life – who want to enjoy a drink without getting stung by further tax hikes. In particular the UK’s 33 million wine lovers, a large proportion of whom are women, are expressing a sigh of relief after they were singled out for a duty rise at the last Budget.

“Today’s freeze is a victory for the WSTA’s hard fought campaign which called on government to help cash-strapped consumers by keeping prices down, and to support British businesses entering a new trading landscape.

“We will all raise a glass to the Chancellor tonight, who has recognised that everyone benefits from a freeze, including the Treasury.”

B&B Association chairman David Weston told Luxury Bed & Breakfast magazine: “We were pleased to see some of the Chancellor’s measures to help small businesses during the COVID-19 crisis – especially his one-year abolition of business rates for B&Bs and similar hospitality businesses with a rateable value below £51,000.”

We remain very worried however about the short and medium-term outlook for our industry, as people’s travel plans are put on hold and leisure spend dries up.”
Wine expert Joe Fattorini, spokesperson for Wine Drinkers UK said: “The recognition by the Chancellor that wine is the nation’s favourite alcoholic drink and therefore shouldn’t be singled out for tax rises is welcome news for the 33 million wine fans in the UK.”

Now it’s time to go one step further and cut back wine tax in the coming year. The last Chancellor to do so was Nigel Lawson, 36 years ago, when wine would not have been as regular a feature in British shopping baskets.

This year, over half of shoppers are set to be priced out as the price of an average bottle rises above £6. With women and the working class being disproportionately penalised by this unfairness, we will continue to lobby for a better deal. It’s high time to reduce wine duty.

And from Simon Robinson, Chairman, WineGB

“We are very pleased that the Chancellor has decided to hold wine duty unchanged this year, which is a fair and welcome support for our growing English and Welsh wine production industry. We will continue to make the case for more targeted relief for small producers and sales at the cellar door which will encourage growth in our industry and generate significant economic benefits (including additional tax revenues) for the UK.”

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