Chancellor Rishi Sunak presented the annual budget yesterday (11th March) where he announced that tens of thousands of firms in England’s hospitality sector will not pay business rates in the coming year.
This is to help the UK’s economy to “recover” after the coronavirus outbreak, which the World Health Organization has declared as a global pandemic. Mr Sunak said in his speech that he is “confident” the economy will get back on its feet.
In the Conservative manifesto, the party pledged to cut the business rates of companies with a rateable value of less than £51,000 by 50%. Yesterday, Mr Sunak said he is taking the “exceptional step of this coming year, of abolishing their business rates altogether.”
He continued: “That is a tax cut worth over £1bn, saving each business up to £25,000.”
Due to many people being advised to self-isolate to minimise the spread of the virus, Mr Sunak announced that the government will pay for sick pay from day one, not the usual day four.
Referencing those who are not eligible for sick pay, he said: “There are millions of people working hard, who are self-employed or in the gig economy. They will need our help too. So, to support them during this period, we will make it quicker and easier to get benefits.”
£2bn will be allocated to cover firms that employ fewer than 250 staff members if they take a hit because staff are off sick.
Comments from the industry
HBAA chair, Lex Butler, commented on the announcement: Many HBAA members – hotels, venues and agencies – are SMEs and they are expecting to experience significant cash flow problems as a result of the coronavirus issue.
“We’re delighted by many of the chancellor’s budget initiatives that will alleviate the pressures that they will face.
“The 12-month abolition of business rates for smaller businesses; the extension of this to include the leisure and hospitality sector; the coronavirus temporary business interruption loan scheme and the refunding of sick pay for staff off sick for up to 14 days will all benefit our smaller business members. The freeze in fuel and alcohol duty and the investments in roads will also help the whole of our industry.
“The cancellation and reduction of meetings and events are already impacting on everyone in our industry so these measures are all very welcome.
“While we would have liked support for training, addressing the immediate issues that we are facing is rightly the priority.
“As this industry generates £43bn each year for the UK economy, we hope that the government will keep the issues that the industry is facing under ongoing review and take further steps to ensure that this valuable sector doesn’t decline into disrepair through lack of support.”
Managing director of Associate Events, Alister de Ternant, commented: “The chancellor’s consideration over small businesses, innovation and ‘investment in ideas’ will ring true to many and it is certainly where the focus should be when ‘playing’ on a global scale.
“I think the country needs a little bit of reassurance, a reset to an equilibrium of economic and regional stability and a social uplift and I feel the chancellor has achieved just that.
“Let us all hope the politicians can deliver upon what’s been promised, immediately and through the longer term.”