UK Budget 2023 – What does it mean to the hospitality industry?
Has the Chancellor thrown the industry a lifeline with the recent budget? What will the effect be on the hospitality sector? Though there is little specifically aimed at the hospitality sector, here are the salient points:
- From August, alcohol taxes on wines will rise by up to 50p a bottle but the duty charged on draught beer will be up to 11p lower than the duty in supermarkets.
- For those working in the sector, 30 hours of free weekly childcare is being extended to cover children below the age of three from April 2024. It will eventually cover all children from the age of nine months, expected to come into effect September 2024. It will only apply to households where both parents are working, and within term-time (38 weeks of the year).
- From April, corporation tax paid by businesses on taxable profits over £250,000 will rise from 19 per cent to 25 per cent.
- For smaller businesses, the Annual Investment Allowance has increased to £1 million, with all businesses able to deduct the full value of investments in IT equipment, plant or machinery from that year’s taxable profits.
- The Energy Price Guarantee, which limits household bills at £2,500, will be extended until the end of June. Whilst this does not apply to businesses, protecting consumers’ pockets until the price of energy drops may lead to an increase in consumer spending.
- The annual tax-free allowance for pensions will rise from £40,000 to £60,000, and the Lifetime Allowance (a cap on the amount that workers can accumulate in pensions over their lifetime, previously set at £1.07 million) will be abolished.
- A new skills offer will be granted to over-50s wanting to return to work in a new sector, and a voluntary employment scheme for disabled people worth £4,000 per person will fund 50,000 job placements every year. Could this be of benefit to hospitality?
- Hospitality may get a boost from the 12 new investments zones that will be introduced across the UK, in the West Midlands, Greater Manchester, Liverpool and Teeside, where successful applicants will be granted £80 million in support. As part of this programme, £400 million will be made available for new levelling up partnerships in areas such as Redcar, Cleveland and Blackburn, worth up to £8.8 billion in over five years. In addition, the Government will invest £200 million in local regeneration projects across England and this again may help hospitality.
Did the hospitality industry expect more, perhaps with a complete overhaul of the business rates system, plus increased support with energy costs? Without the right conditions to grow, it is likely businesses may struggle with high business rates, unaffordable tax bills and staffing problems. Childcare support will benefit many in the sector, especially parents who want to get back to work after having a family.
One welcomed change for the pub industry will be the freezing of duty on draught beer, so customers will pay less tax on a pint in their local pub, as opposed to buying beer from supermarkets.
Confused as to what this will all means? Contact Paperchase and we can help you to understand what the benefits may be to your business.