The trade association
A budget with little relief for Bacta members
Bacta were slightly torn by a budget that delivered hope for its seaside members but despair for the supply chain. As one would expect, the latter needed the vocal support and the body didn’t bite its tongue, accusing the government of silence on support for the supply chain and an inaction that will jeopardise the recovery.
JOHN WHITE CHIEF EXECUTIVE BACTA
Overall, the Budget is a disappointment to Bacta members, who did not receive the support they so desperately need in the final months of this lockdown and beyond.
Clearly, we are pleased to see the extension of the CJRS and the rates relief and grants for retail leisure and hospitality albeit that they will not be as generous as previously.
We are however deeply frustrated that the Chancellor did not take the opportunity to include seaside amusement arcades in his 5 percent VAT relief.
He was also totally silent on support for supply chains. That is a huge oversight and jeopardises the recovery.
For companies so badly affected, the 25 percent Corporation Tax rate from April 2023 for companies with profits over £250k is a kick in the teeth.
New loans are just adding more debt to already distressed companies.
We have written to the Chancellor to make these points very forcibly.
The gambling business trade body
The industry needs an early return
PETER HANNIBAL CHIEF EXECUTIVE GAMBLING BUSINESS GROUP
In an unprecedented year, the government has spent £350bn on getting through Covid-19 and as it’s going to take a few generations to pay this money back, as such we shouldn’t be trying to do too much too quickly and, in the process, jeopardise the recovery.
The two key priorities are saving and protecting jobs and saving and protecting businesses. The extension of the furlough scheme is critical to the recovery.
The offline gambling sector has had a pretty rough ride through this and it would have been helpful if more could have benefited from the 5 percent vat rate for Hospitality.
Freezing the basic rate of income tax from 2022 will impact consumers leisure spending. This will not be good for the sector when the impact eventually filters through.
Even though the corporation tax hike has been deferred to 2023, it is still a concern that it will hamper the pace of recovery.
But the Government will have a clearer picture of the post-covid economic landscape by then. Interest rate increases and the Autumn spending review are the next concerns.
The pub trade
Good news for pubs in the short-term, but long-term stimulus still needed to secure the great British pub
BBPA CEO Emma McClarkin saw a lot that was good in the chancellor’s budget this week, but it wasn’t going to spur a full-on recovery for her members. Some analysts called the budget a plaster, others, like McClarkin, went a little further saying far more is needed to ensure survival for thousands of pubs.
EMMA MCCLARKIN CHIEF EXECUTIVE BRITISH BEER & PUB ASSOCIATION
We welcome the Chancellor’s announcement of continued support for the devastated pub sector in the form of additional grants, as well as extensions to the job retention scheme, 5 percent hospitality VAT rate and business rates holiday.
“The new grants are worth £400 million for pubs and will go some way in helping many of them survive through to the time when they can reopen and operate viably. It is, however, crucial that the Government ensures all pubs benefit, including those that are part of a group, by removing the current State Aid cap.
“The extension of the job retention scheme until September will help save thousands of pub jobs. Worth £700 million to our pubs and brewers, it gives the sector time to reopen and rebuild trade before bringing all staff back, which would otherwise be too costly and unviable whilst still facing trading restrictions until end of June.
“It is imperative that the Government allows pubs to operate without restrictions as planned from 21st June. This will give them the best chance to get back on their feet and serve their communities.
“Extending the 5 percent VAT hospitality rate until September and at 12.5 percent thereafter is most welcome. We calculate it is worth £485 million to pubs. With all pubs having been closed for so long, the lower VAT rate has been of limited benefit so far, tens of thousands of pubs will not benefit from this until they reopen on 17th May at the earliest and then still at reduced capacity. However, wet led pubs will be especially disappointed again that the reduction will not apply to all beverages so they too can benefit from this.
“We campaigned hard for an extension of the business rates holiday and the Chancellor announced a 100 percent cut on rates until June and up to a 66% cut for the following 9 months. This is good news, but the proposed cap will mean many pub businesses will not benefit fully from this. We await to see more detail.
“Having called for a cut in beer duty and being a staunch supporter of the Long Live The Local campaign, a beer duty freeze will be seen as much needed short-term relief for the sector. However, the Chancellor has only partially listened to the 500,000 campaign supporters who signed the petition calling for a cut in beer duty. We now hope the Government will use the ongoing Alcohol Duty Review to cut beer duty to support our brewers and pubs and level the playing field with other brewing nations. The Government must support and promote Britain’s extraordinary pub and brewing sector in the way other Government’s support their domestic industries.
“Overall, this is a good Budget for pubs and breweries in the short term, reflecting just how vital they are to the social, cultural and economic fabric of our communities.
“However, this is just the start of the journey on the hard road to long-term recovery for our sector. The Chancellor has made it clear today he recognises the vital role local pubs play in their communities. Now he must continue that commitment by ensuring Britain’s pubs and breweries are supported in the long term. This should start by extending the VAT cut on hospitality to all drinks until at least the end of the year. We also need a fundamental reform of VAT, business rates and beer duty to ensure that the thousands of pubs and breweries across the UK can thrive and help drive the social and economic recovery we urgently need.”
• A number of members asked about the increase in gaming duty. This is a specific duty on casino table games and not MGD.
• The retail, leisure and hospitality rates relief does apply, as now to, FECs and AGCs (in England). There is a cap of £2 million for the nine months of the reduced two-thirds rate. The reference to being closed in yesterday’s update is part of the eligibility criteria and refers to businesses that were required to be closed on 5th January 2021 – which FECs and AGCs were.
• Division 2 and 4 members should note that a further £425 million has gone to local authorities for discretionary grant funding. This was a previous announcement but my advice again is keep badgering your local authority. The grants are meant for you.
• The super-deduction applies to ‘eligible plant and machinery’. Subject to further detail being published, this covers machine purchases.
• Another item I think worth highlighting is the three year extension to loss carry back announced yesterday, given the impact of the pandemic on Income and Expenditure accounts.
• The Welsh Government announced another £30 million for retail leisure and hospitality business. The Welsh budget in on12th March.
• The 5% reduced rate of VAT will be extended for six months to 30th September. It will then have an interim rate of 12.5% for another six months.
• Gaming Duties will rise in line with RPI.
• A new Recovery Loans Scheme will come into force in April, where businesses of any size can apply for loans from £25,000 – £10,000,000, through to the end of this year. Government will guarantee up to 80% of lending by providers.
• A new Restart Grant Scheme: £5bn fund to help High Street shops and hospitality firms recover with non-essential retail eligible for grants up to £6,000 and hospitality and leisure businesses more impacted eligible for grants up to £18,000.The restart grants are as now available to businesses irrespective of RV. So if you are over £51k you get them.
• Super Deduction: for the next two years when companies invest in new equipment they can offset all of the cost against tax, plus an additional 30 percent.