Arguably the most vital budget announcement ever for hospitality industry was recently announced to the House of Commons by Rishi Sunak.
Following last week’s announcement about reopening dates for the hospitality industry it was vital that the 2021 budget provided support for the hospitality industry in the short term and going forward. So, what did Wishy Washy Rishi have to say for himself? Here are the key points followed by a more in-depth look at each one:
- Furlough Scheme extended until end of September
- Universal Credit’s £20 weekly increase extended for another 6 months
- Business Rates Holiday extended until end of June, then discounted until end of year
- High Street Business Reopening Grant of up to £18K per venue
- Recovery Loan Scheme of £25K – £10M available up until the end of the year
- VAT Reduction continued until end of September then at 12.5% for 6 months
- Self-Employment Income Support Scheme has been extended to include a 5th grant
- No rise to Income Tax, National Insurance or VAT rates
- All alcohol duties to be frozen for the second year in a row
As widely expected, and predictably leaked last night, the furlough scheme has been extended until the end of September. It may seem that this extra length is unnecessary seeing as we will be opened up way before then, but it is important to note that there are still some unknowns going forward. Will people go out as much as before? Will there be restrictions on amount of people allowed in venues? Will businesses have to run with skeleton staff on opening to fill up the coffers?
All of these factors could mean that some staff may have to remain on furlough after the reopening dates. With that in mind these are the latest furlough dates:
Now – End June: Government continue to pay 80% of wages for those hours staff are unable to work
July: Employers will have to pay 10% of this cost
August – September: Employers will have to pay 20% of this cost
A big lifeline to many during the last year it was confirmed that the £20 a week increase in payments will be continued for another 6 months until the end of September. This will have to be paid as a one-off payment of £500 due to the way the system works. In a conversation with Jason-Candid Knüsel we discovered just how vital that extra Universal Credit payment is.
Business Rates Holiday
This vital scheme has helped spreadsheets across the country in the last year and was originally due to end on March 31st. This has been extended until the end of June. From there they will be reduced by two thirds until the end of the financial year.
High Street Business Reopening
Another announcement that has been doing the rounds on the rumour mill with a grant of up to £18K per venue for hospitality. Non-essential shops, which are due to open sooner, will be getting up to £6K.
Recovery Loan Scheme
The Business Interruption Loans were widely taken up by businesses across the country. Another loan has been announced, this time the Recovery Loan Scheme will be available to businesses of all sizes to the value of between £25K – £10M. These loans will be 80% guaranteed by the government and will be available until the end of the year.
The discount which doesn’t effect alcohol but does cover soft drinks and food will continue until end of September at the current rate of 5% then at 12.5% for 6 months.
Self-Employment Income Support Scheme
From April a 4th grant will be available worth 80% of three months’ average trading profits up to £7,500. It is said that this will help many more people who previously couldn’t get the grants as they now cover the 2019-2020 tax return period.
A fifth grant was announced covering May – July which will be able to be applied for in late July, although a change in the pay-out has been announced. If you have had your turnover drop by over 30% you will receive the 80% average trading profits still, if your income has dropped by less than 30% it will be 30% of your average trading profits.
The finer details of all of these announcements will be made available in the coming days, we will link to those as soon as we have them.
It is fair to say that the pressure from the hospitality industry through the medium of MP’s and the press has had an effect on the budget support for the industry. Hopefully these announcements will allow businesses across the country concentrate on the business of re-opening. The next key point is the publishing of the restrictions we will be working with when the doors are opened.
The continued victimisation by this government of the hospitality industry with regards to restrictions continues and will not, and should not, be forgotten. There will be a reckoning but for now perhaps we can look forward to doing what we do best. People will need us more than ever this summer.