What does the Autumn Statement mean for hospitality?

By Sophie Witts contact

- Last updated on GMT

What does the Autumn Statement mean for hospitality?

Related tags: Small business rate, Business rates in england and wales, Business, Taxation in the united kingdom

The Autumn Statement brought good news for the hospitality sector with a slashing of business rates, but failed to mention a cut in tourism VAT.

In a budget focused on ‘delivering what business needs’ the Chancellor outlined plans to ‘rebuild Britain’.

Business rates

Osborne abolished the uniform business rate in a move designed to give local councils the chance to ‘drive growth in their area’.

He also extended the Small Business Rate Relief scheme for another year, following warnings from the British Beer and Pub Association (BBPA)​ that scrapping the plans could see community pubs close nationwide.

Councils will be given the power to cut rates to make their area ‘more attractive to businesses’, while elected mayors will be able to raise rates to fund infrastructure projects supported by the local business community.

However, the Chancellor ignored the BBPA’s calls for the introduction of Retail Relief​ – which would provide a tax discount for pubs with a rateable value of £50,000 or less.

Apprenticeship levy

The statement brought a long-awaited clarification​ on the Government’s planned Apprenticeship Levy.

As part of a drive to ‘ensure large businesses share the cost of training the workforce’ Osborne set the rate at 0.5 per cent of an employer’s wage bill.

“Every employer will receive a £15,000 allowance to offset against the levy – which means over 98 per cent of all employers - and all businesses with paybills of less than £3 million - will pay no levy at all,” he said.

The scheme is set to raise £3bn a year from 2017 to fund 3m apprenticeships by 2020.

But the levy has met with scepticism from employers amid concerns that the drive to increase the number of placements could decrease the quality of training.

In a move designed to placate doubters, Osborne announced that Business Secretary Sajid Javid will create a new business-led body to set standards for the scheme.

“It’s a huge reform to raise the skills of the nation and address one of the enduring weaknesses of the British economy,” said the Chancellor.


Despite fears that the axe could fall heavily on VisitBritain​, the review was largely positive towards tourism with the Government holding off on ‘deep cuts’ to cultural attractions.

The Department of Culture, Media and Sport's administration budget fell by 20 per cent, but money to the Arts Council, national museums and galleries will be increased and free museum entry will remain.

“One of the best investments we can make as a nation is in our extraordinary arts, museums, heritage, media and sport,” said Osborne.

“£1bn a year in grants adds a quarter of a trillion pounds to our economy – not a bad return.”

Enterprise zones

Twenty-six Enterprise Zones, including 15 in towns and rural areas such as Carlisle, Dorset and Ipswich, will be created in a bid to encourage regional business investment.

“It is the most determined effort to change the geographical imbalance that has bedevilled the British economy for half a century,” Osborne told a packed Commons.

What was missing?

Once again the Government failed to mention a cut in tourism tax, despite the creation of a cross-party parliamentary group of MPs​ lobbying for the change.

The Cut Tourism VAT campaign – a coalition of 43,000 hospitality businesses - has argued that reducing the tax from 20 to five per cent could be worth £20bn to the UK over ten years.

Related topics: Business, Restaurants, Hotels, Pubs & Bars

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