Autumn Budget 2021 - The Hospitality Sector
A number of Business Rates changes were announced by the Chancellor:
- The Government’s review of Business Rates has been concluded and the report has been published. The consequences of this will become apparent in the coming months.
- The Business Rates Multiplier, which is used to calculate the business rates bill, and was due to increase, has been frozen for a second year, meaning bills will not increase in April 2022.
- Businesses in the retail, hospitality and leisure sectors will receive a 50% reduction for 2022-23, up to a cap of £110,000. This is a continuation of the relief currently available, meaning that bills will now not increase in April as originally expected.
- A new 100% improvement relief for business rates will be introduced. This will provide 12 months relief from higher bills for occupiers where eligible improvements to an existing property increase the rateable value. The government will consult on how best to implement this relief, which will not take effect until 2023.
- Introduced from 1 April 2023 until 31 March 2035, targeted business rate exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible heat networks, to support the decarbonisation of non-domestic buildings.
- Increase the frequency of business rates revaluations so that they take place every 3 years instead of every 5 years, starting in 2023.
These changes are to be welcomed, and will reduce the business rates burden for 2022, and future bills will not increase as quickly where improvements are carried out to a property.
There were few other announcements directly impacting hospitality businesses. Recruiting and retaining staff is the biggest challenge for most businesses, and the increase in the National Living Wages to £9.50 per hour had already been leaked. Added to the additional National Insurance charge of 1.25%, this will increase wage costs for all businesses.
The Chancellor also announced a raft of changes to Alcohol Duty, which should hopefully increase bar margins.
Rumoured changes to Capital Gains Tax and Inheritance Tax did not materialise.
Watch our Autumn Budget webinar or listen to our podcast for further analysis.