Autumn Statement 2014: What it means for hospitality

By Melodie Michel contact

- Last updated on GMT

Chancellor George Osborne announced more business rate reliefs in his 2014 Autumn Statement
Chancellor George Osborne announced more business rate reliefs in his 2014 Autumn Statement

Related tags: Business rate relief, Small business rate, Business rates, Taxation in the united kingdom

Chancellor George Osborne reiterated the government’s support for small businesses in his 2014 Autumn Statement yesterday.

Stating once again that the government’s “long-term economic plan is working”, the Chancellor announced a series of tax measures aimed at reducing government deficit while boosting growth.

Business rates review

In order to continue supporting small businesses, the government will continue to cap the inflation-linked increase in business rates at 2 per cent – a measure announced for the first time last year​ and welcomed by the hospitality sector​.

Additionally, the £1,000 discount on rates for high street shops, pubs and cafes introduced last year will receive a 50 per cent increase to £1,500 next year.

Osborne also said he would double Small Business Rate Relief – which allows owners of businesses with a rateable value of under £18,000 (£25,500 in London) to claim up to half of their business rates back – for another year.

“The government has repeatedly helped small businesses deal with the burden of business rates. We do so again today.

[The Small Business Rate Relief] benefits half a million firms, means a third of a million firms pay no rates and we’ll continue to fund it,” he said

To find a longer-term solution, the Chancellor announced a full review of the structure of business rates, and urged business groups to engage with the government.

National Insurance for young apprentices

Osborne also announced that as well as abolishing national insurance contributions for employing anyone under the age of 21 next April, the government would scrap the jobs tax on young apprentices.

"Since 2010, almost 2 million people have taken up an apprenticeship. The Prime Minister has set this country an ambition of 3 million apprentices in the next parliament. So we back the businesses who employ apprentices, especially young apprentices under the age of 25. Today I can announce that the jobs tax on young apprentices will be abolished altogether. When a business is giving a young person a chance in life we’re going to support them not tax them," he said.

Air Passenger Duty

In another move likely to affect the tourism and hospitality industry, Osborne said Air Passenger Duty (APD) for children under 12 would be abolished as of 1 May 2015.

“And I’ll go further than … asked. From the following year, we’ll get rid ofAPD for children under 16 altogether,” he added.

Revised growth and deficit

The Chancellor was happy to report higher growth, lower unemployment and falling inflation, “a forecast that shows the UK is the fastest growing of any major advanced economy in the world”.

He explained that business investment had grown by 27 per cent over this parliament (as opposed to the 4 per cent predicted), while the economy grew 8 per cent.

He hailed measures that helped with the creation of over half a million new jobs over the past year, and the reduction of government deficit to 5 per cent of GDP.

Osborne also presented numbers highlighting the drop in borrowing from £91.3bn this year to £75.9bn next year and gradually less, forecasting a return to a £4bn surplus in 2018-19.

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