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Budget 2016: Impacts on the hospitality industry at a glance

Budget 2016: Impacts on the hospitality industry at a glance

08/04/2016 10:45 AM |

George Osborne’s 2016 budget contains some measures that the hospitality industry has welcomed with open arms, whilst others have left a sour taste. The reaction had been mixed, but what does it actually mean for you?

Small business tax relief

From April 2017 the threshold for small business rate relief will increase from £6,000 to a maximum of £15,000, with the higher rate relief also rising from £18,000 to £51,000. He claims that it means 600,000 small firms will not have to pay business rates, and 250,000 will pay lower rates. This will provide a significant saving for independent restaurants, bars, and cafes, and should help to ease the pressure of the rising National Living Wage.

Freeze in beer duty

This freeze means that beer duty is now 17% lower, and 20p cheaper in pubs, than it would have been under the escalator policy. This may seem like a really positive step, however, we are still paying the second highest beer tax in Europe, and with the living wage increase and apprenticeship levy pubs are facing a rise in costs over the coming months.

Cut in commercial stamp duty

The stamp duty on commercial property is being cut, for example, if you buy a pub worth £270,000, you used to pay over £8,000 in stamp duty. Now, you will only pay £3,000.  Commercial property worth up to £150,000 will be exempt from paying stamp duty, then a 2% levy on the next £100,000 and 5% for properties of £250,000 or more. This is a big cut for small firms and a tremendous boost for our industry.

The Sugar Tax

In principal this sounds like a great idea, given the statistic we are feed about the obesity crisis and the amount of sugar young people are consuming. However, vital confirmation is needed that this tax will be a levy on producers and will not increase costs for retailers, as these costs shouldn’t be passed onto pubs and bars.

Only time will tell how these will really impact on our industry, but with some clarification on where the costs will fall on the sugar tax, we think it is looking positive for the sector, especially for small businesses.