Spring 2023 Budget: Takeaways for Hospitality and Urban Life

Hunt said that “high inflation is the root cause” of the strike that is currently affecting many industries in the UK. Train and tube strikes taking place in the UK this week are expected to cost the hospitality industry up to £600m, according to United Kingdom Hospitality.

The contents of the Budget that affect the hotel industry include:

• From August, the alcohol tax on wines will increase to 50p per bottle, but the tax on draft beer will be up to 11p lower than the tax on supermarkets.

• The annual tax-free allowance for pensions will be increased from £40,000 to £60,000, and the Lifetime Allowance (a cap on the amount workers can accumulate in pensions over their lifetime, previously set at £1.07) will be abolished. millions).

• From April, corporation tax paid by companies on taxable profits above £250,000 will increase from 19 per cent to 25 per cent.

• For smaller companies, the annual investment allocation has increased to £1 million. Hunt said that 99 percent of all companies will be able to deduct the full value of all their investments in IT equipment, plant or machinery from taxable earnings for that year.

• 30 free weekly hours of child care will be extended to cover children under the age of three from April 2024. Eventually, it will cover all children nine months and older, and is expected to go into effect in September 2024. 2024. It will only apply to households where both parents are working, and within the deadline (38 weeks of the year).

• A new skills offer ‘Returnerships’ will be awarded to those over 50 who want to return to work in a new sector, and a £4,000 voluntary employment scheme for disabled people per person will fund 50,000 job placements each year.

• The Energy Price Guarantee, which limits household bills to £2,500, will run until the end of June. While this does not apply to businesses, protecting consumer pockets until energy prices drop can lead to increased consumer spending.

The contents of the Budget that affect urban coexistence include:

• 12 new investment zones will be introduced across the UK, which Hunt described as ‘potential Canary Wharfs’. Areas include the West Midlands, Greater Manchester, Liverpool and Teeside, for which successful applicants will receive £80 million in support.

• The UK Government will invest £200 million in local regeneration projects across England.

• £400m will also be made available for new grading partnerships in areas such as Redcar, Cleveland and Blackburn, worth up to £8.8bn over five years.

Hospitality leaders respond to the spring budget

Sam Martin, CEO of Peckwater Brands, said: “Hospitality is a linchpin of trade and jobs, and can be an important driver for economic growth and recovery. However, the sector is also more affected by the current challenges than most, as they are energy intensive and subject to the inflated price of goods, particularly food costs.

“To allow hospitality to thrive, businesses required a major overhaul of the business rate system, an injection of staff, and increased support with energy costs. The measures laid out for hospitality in the spring budget fall short of the level of support that industry leaders have been clamoring for for the past year.

“Hospitality can be an engine for the economy and a source of both employment and tax revenue, but without the right conditions to grow, we are likely to see businesses shuttered due to high business rates, unaffordable tax bills and staff shortages. Short-term support with energy bills may keep the lights on for months to come, but without further action, the prospect of a return to pre-pandemic levels seems slim. I only hope that more can be done to prop up businesses affected by rising costs and that people continue to support the pubs, bars and restaurants in their communities.”

Lionel Benjamin, Hotels AGO co-founder, said: “With the continuing economic struggles facing SMEs, companies were considering today’s budget to provide a lifeline. He fell short.

“It was disappointing that the Chancellor did not reverse next month’s corporate tax increase. With double-digit inflation and rising bills, this means more costs for businesses that we’re trying not to shift to the consumer, but it’s getting harder not to, and in the coming months we may see more businesses go out of business. Their doors. .

“Hunt made announcements aimed at boosting the economy, including 12 new investment zones, redevelopment projects in key urban centers and business rate retention, giving local authorities more control over spending. However, the devil will be in the details and we believe that specific incentives are needed around the regeneration of downtown buildings, particularly those that are closed, into hotels.

“At AGO Hotels we are calling for a reduction in output VAT to 10 per cent, expanding the scope of capital allocations offered to encourage ESG development and investments, and a comprehensive review and reduction of the widely outdated system of business fees. For the hospitality industry to thrive and survive, we need more.”

Clare Anna, Commercial Director, London Rock Partners: “The most disappointing piece was the lack of clarity from the Chancellor on the continuation of reimbursement for utilities across the hospitality sector. The cost of public services is what most concerns hoteliers in the UK today.

“However, it was good to hear about the added incentive around childcare, as parents, especially women, have long returned to the hospitality workplace with flexible and affordable solutions.”

James Shorthouse, Director of Alternative Markets at miners, said: “The pub industry and its customers will raise a glass to the chancellor this afternoon when he froze the tax on draft beer so that customers pay less tax for a pint at his premises than when they buy a beer in the supermarket. shelves. But while traders will welcome the extra sales the price gap will generate, the industry will also see that this was a missed opportunity for the Chancellor to provide significant support to businesses by freezing or even removing trading fees, or introducing a permanent reduction. of VAT. for the hospitality.

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