Dave Gosling – Hospitality & Leisure Specialist
This was a budget set against the background of the Coronavirus epidemic, for the Chancellor to provide the fiscal support to impacted businesses and services, while planning for the Government’s long-term priorities.
This was a budget to turn the spending taps on full: to invest in public services and to provide the promised Infrastructure Revolution; for ‘levelling-up’ opportunity across regions of the country that have supported the Conservative Party for the first time. Overall, it will be seen as good news for businesses, although there were relatively few tax measures overall with the majority of attention focussed on spending.
The key Budget 2020 takeaways for the UK hospitality & leisure sector
Rishi Sunak was only appointed Chancellor less than 28 days ago, so hasn’t had the longest of times to get to grips with the new role. However these 28 days will feel like a lifetime following the few days he has had to digest and amend the budget for the effects of the Coronavirus. Included in this year’s budget are a number of measures, both positive and negative, which will affect Hospitality & Leisure businesses.
Positives for the H&L Sector
- Business Rates suspended for business with rateable values of less than £51,000
- Cash grants of £3,000 to small businesses with rateable values of less than £15,000
- Small pub business rates discount increased from £1,000 to £5,000 for rateable values under £100,000
- Beer, wine and cider duty frozen, which is only the second time in 20 years that duty on all types of alcohol has been frozen
- Assistance for businesses affected by Coronavirus
Challenges for the H&L Sector
However, there were a few disappointing announcements including
- The planned reduction in corporation tax from 19% to 17% will not happen
- Entrepreneurs Relief will reduce from £10m to £1m. This will have a significant impact on business owners looking to sell and could result in either alack of supply of businesses looking to sell or driving up the asking price of businesses.
Unfortunately, there was no further consideration on the recent announcement on immigration plans which will have a significant impact on the sector and there was no consideration to a reduced rate of VAT for the H&L sector, which would have brought the UK in line with other EU countries.
To discuss any of the above or the implications of Budget 2020 on you or your hospitality & leisure business, please contact your Menzies Relationship Partner.