This time last year, coronavirus was declared a pandemic just hours after Rishi Sunak delivered his first Budget, effectively rendering the numbers meaningless. Furlough and lockdown were barely in our vocabulary and the idea that pubs, bars, cafés and restaurants across the UK would still be closed now was unthinkable.
Fast forward to March 2021 and the hospitality industry continues to face very real threats, which is one of the reasons why this Budget has been labelled the most important in a generation. Here are some of the key points for our industry.
The Coronavirus Job Retention Scheme – more commonly known as the furlough scheme – has been extended until the end of September, providing hope for millions of employees who were temporarily laid off while venues are closed. The scheme was due to expire at the end of April but is being extended, with employers asked to contribute 10% in July and 20% in August and September.
Research from Statista shows that 83% of business leaders in the eating and drinking out sector had to furlough more than 90% of their staff in 2020.
Retail, hospitality and leisure grant
Rishi Sunak also announced a new £5billion fund to ‘help businesses reopen and get going again.’ Hospitality and leisure businesses can claim grants up to £18,000 under the scheme, with grants set to be distributed by local authorities from April.
Another point of interest for our industry was the move to extend the 5% reduced rate of VAT for tourism and hospitality businesses for a further six months, until the end of September. This will be followed by an interim rate of 12.5% for a further six months.
Business Rates holiday
The 100% business rates holiday in England has been extended from April until June, offering further support for those with premises that have been unable to open throughout the lockdown.
Alcohol duties frozen
Rishi Sunak also confirmed that a planned increase on alcohol duties will be cancelled, another move which will be welcomed by the trade.
This is all good news of course, but time will tell whether it is enough to keep thousands of pubs, cafes, restaurants and hotels in business. One worrying survey from the end of last year showed that 72% of hospitality and pub businesses expect to close in 2021 without further support from the Government. I hope these announcements and the gradual easing of lockdown restrictions will be enough to stem the tide.
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