Home Business News Spring Budget: Alcohol tax to stay frozen for second year running

Spring Budget: Alcohol tax to stay frozen for second year running

by LLB Finance Reporter
3rd Mar 21 1:30 pm

Setting out his Spring Budget, the Chancellor has announced that wine and beer tax will remain frozen for the second year running.

He told MPs in the House of Commons this will apply for all pubs, bars, restaurants and breweries and tax will also remain the same to help firms who are struggling.

This move will be hugely welcomed by the hospitality sector who have been hit the hardest during the three lockdowns, which will now give them a lifeline after a year of closures.

Since the start of 2020 around 12,000 licensed premises closed for good as a result of the pandemic. Hospitality and tourism sector are to have the 5% reduced rate of VAT for a further six months.

However, the Chancellor has failed to “recognise the need for additional support for the night time” economy sector, which generates £66bn in Annual Revenue pre Covid, and cannot be ignored as the 5th biggest Industry in the UK.

Michael Kill, NTIA CEO said, “In our pre-Budget survey, nearly 80% of nightlife businesses said this Budget was critical to their survival. Despite this, the Budget is yet another statement from the Chancellor that has failed to recognise the need for additional support for the night time economy sector.

“We welcome the extension of VAT and rates relief, and that more money is going to hospitality and the Culture Recovery Fund (CRF). But both of these interventions again reveal the Chancellor’s inability to comprehend the specific challenges faced by night time economy businesses, such as nightclubs, casinos and bars, many of which have been entirely unable to open during the pandemic and face higher costs relative to wider hospitality. With no meaningful expansion to CRF eligibility, and no bespoke support for our sector, we are once again left with a package totally incommensurate with businesses’ costs – including spiralling commercial rent arrears. The loan solutions outlined by the Chancellor just aren’t good enough for businesses that are already overburdened with debt”

“It is also welcome that furlough has been extended and SEISS expanded, but it’s unacceptable that the Chancellor continues to let down other freelance workers in our sector who have missed out on support to date. Surveys have revealed two thirds of nightlife freelancers have been unable to access support, and today’s expansion – while welcome – will only make a small dent in this figure.

“I am also disappointed that the Chancellor didn’t take this opportunity to introduce a Government-backed insurance scheme for events this summer. Our world-leading festivals are at the heart of the UK’s cultural life – but because of the announcement today, so many events will be needlessly cancelled, or postponed to 2022.

“While the roadmap announcement gave hope to our sector last week, the Chancellor is now at risk of snatching defeat from the jaws of victory. With the money spent on support to date, it is ridiculous that many nightlife businesses may now fall at the final hurdle. The blame for this unnecessary personal hardship, and damage to the wider economic recovery, will fall at the Chancellor’s feet, unless he acts to ensure that proportionate sector specific grant funding is available immediately for night time economy businesses.”

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