Pubs, restaurants and cafes with a rateable value of less than £51k will have their business rates reduced by a third according to the 2018 Budget.
The Chancellor of the Exchequer has announced the 2018 budget this afternoon. He has declared that the ‘era of austerity is finally coming to an end’ – but what does this mean for the hospitality industry?
One of the first points of interest was that smaller firms who are taking on apprentices will have their contribution apprenticeship levy reduced from 10% to 5%. Could this encourage more businesses and restaurants to take on more apprentices?
With so many high street businesses going into administration, the Government has pledged that they will allocate £675m for a ‘future high streets fund’ which will be allocated to local councils to facilitate disused sites for redevelopment.
One of the most significant points stated in the 2018 budget was that pubs, restaurants and cafes with a rateable value of less than £51k will see their business rates curtailed by a third which could see a saving of up to £8000. This is expected to be honoured over a period of two years when the business rates will be reviewed once again.
The VAT threshold will remain unchanged for small businesses for the next two years as well.
Phillip Hammond stated that whilst there will not be a tax against plastic cups, that plastic will be taxed at the point of production and import if there is contains less than 30% recycled materials.
It was reported that beer, cider and spirits duties will be frozen but this would not apply to wine.
Lastly, the National Living Wage will increase to £8.21 from £7.83 and that individuals Personal Tax Allowance will increase to £12,500 from April 2019.
There have been many reactions on social media from both people working in the hospitality industry and beyond, which included the likes of finance expert Martin Lewis who said:
Kate Nicholls said:
Jill Whittaker, Managing Director of HIT Training – the apprenticeship provider of choice in the hospitality industry commented:
“We are delighted that the Chancellor has chosen to reduce the cost of apprenticeship training for non-levy payers, with the government now committing to a contribution of 95% and employers paying the remaining 5%. This means, for example, that the cost to an employer of training a commis chef or chef de partie reduces from £900 to £450, and for a team leader from £450 to £225.
In the current economic climate, any additional costs to businesses are tough, but the value that an organisation can get from well-trained employees delivers in so many ways – reduced staff turnover, increased productivity, less waste and improved job efficiency. We hope that today’s news will mean that SMEs – many of which stopped taking on apprentices when the Apprenticeship Levy was introduced – will come back to apprenticeships as an effective and beneficial way to train their staff and improve their businesses.”
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