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COMMENT: UKHospitality’s Kate Nicholls on the key points of the Budget

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Trade body UKHospitality has given its verdict on the key points of the 2021 Budget. Chief executive Kate Nicholls said the Chancellor had listened to the concerns of the hospitality sector but that it was now vital that the government sticks to its date of 21 June for a full reopening of the sector. 

On VAT…

“An extension of the 5% VAT rate was absolutely crucial for hospitality businesses,” she said. “Confirmation that the government will provide support for a full year will bring peace of mind to the sector. UKHospitality has been pushing hard for this and it was critical that it was delivered today.Story continues belowAdvertisement

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“While it would have been better to have extended the 5% rate further, it is now vital that the government looks at introducing the interim rate for hospitality on a permanent basis. It would be a positive legacy of an otherwise dreadful year for our sector. A permanent reduced rate of VAT for hospitality would redress the unfair tax imbalance that our businesses have faced for too long and make us internationally competitive.”

On business rates…

“It is great that this fixed cost has been eliminated during the recovery and is heavily reduced for the rest of the financial year. It will give some much-needed breathing room for businesses as they prepare to reopen, though the cap will impact some larger businesses. Not all businesses will be able to reopen swiftly, it will take them time to get up and running. They will be burning through meagre cash reserves as they do so, so this extra flexibility is going to crucial in ensuring as many as possible stay alive.

“The forthcoming revamp of the rates system then has to deliver a wholly new system of business tax that no longer unfairly penalises our sector.”

On grants…

“The previously announced grants are a welcome boost. The priority now is making sure that these grants find their way to the businesses that need them as quickly as possible and that interest rates are capped. It is critical that Government makes clear that EU State Aid rules do not apply to these grants.”

On furlough…

“The extension of the scheme brings stability and peace of mind to employees after a dreadful year of uncertainty. There is still a worry that it will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet, though.”

On duty…

“Scrapping any increase on the rate of alcohol duty is a pragmatic step. Additional costs were the last thing that businesses needed at the minute. As we emerge from the crisis, we hope that the Government will seriously consider a separate rate, long pushed for by this sector, for on-trade alcohol.”

On the recruitment bonus…

“Increasing the recruitment incentive will be a major boost in helping the hospitality sector rebuild once the crisis has passed. The doubling of the apprenticeship incentive will be a major boost for our sector’s recovery and aids our commitment to upskilling people across the country. Driving the economic recovery of the UK will be dependent on getting people back into work and this will be a huge help. The hospitality sector is going to be a key weapon in the country’s arsenal if it wants to rebuild the economy and tackle unemployment.”

On investment relief…

“The commitment to encourage investment, with 130% tax reliefs, is very encouraging as we re-build and re-generate high streets and local communities.”

On rents…

“The biggest gap in support remains the outstanding sector rent debt. We need the Government to announce an extension of the moratoria at the earliest opportunity and work with industry to establish a landing zone to resolve this £2bn millstone around our recovery.”

Tags : budgetKate NichollsUKHospitality
Andrew Seymour

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