I want to see the Government continue to support pubs and I welcome the Prime Minister's recent announcements to use our Brexit freedoms to reform alcohol duties and help our hospitality sector post-pandemic.
2023/24 - Conservative Government's Brexit Pubs Guarantee
At the Budget in 2020, the Government announced that it would review alcohol duty, to reconsider the way that the duty system would work after the UK left the EU. At the Spring Budget in 2023, the Government announced how these reforms would be implemented and support our hospitality sector.
Firstly, implement savings on draught drinks in the pub for all draught products below 8.5% alcohol by volume through increasing Draught Relief as part of this Government’s Brexit Pubs Guarantee commitment for every pint in every pub to pay less duty than their supermarket equivalent. Secondly, tax was cut on lots of popular drinks in shops like sparkling wines and ready-made drinks. Finally, the new Small Producer Relief was announced to help small businesses and start-ups create new drinks, innovate and grow. These reforms cut duty on pints in pubs by up to 11p when sold in supermarkets.
The Government has also announced that from 1st February to 1st August 2024 all alcohol duty will be frozen. Not increasing alcohol duty in line with inflation has now saved a further 3p to the duty on a typical pint of beer, 2p to a pint of cider, 4p to a glass of whisky, or 18p to a bottle of wine.
Retail, Hospitality and Leisure business rates relief have also been extended for a fifth year to 2024-25. This means around 230,000 retail, hospitality and leisure properties will receive 75% relief, up to a cap of £110,000 per business, on their business rates bills from the 2024-25 tax year. This is a tax cut worth nearly £2.4 billion and comes on top of one third of business properties being taken out of paying business rates completely thanks to other government reliefs. The small business multiplier for business rates was also frozen for a fourth consecutive year, protecting over a million ratepayers from an inflation increase in their bills.
We can all agree that British pubs are a significant part of the fabric of communities across the country and this unprecedented support will help the sector while the Government continues to bring down inflation while driving growth and investment.
Support For Pubs During Coronavirus
To protect jobs, the Coronavirus Job Retention Scheme has been extended until September in response to restrictions, and to give people and businesses across the whole United Kingdom the certainty they need. Under the extension, the Government will pay 80 per cent of wages up to a cap of £2,500. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May and June. From July, the Government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September, as the economy reopens. Flexible furloughing will be allowed in addition to full-time furloughing.
One-off top-up grants were previously announced, worth up to £9,000 per property, to help businesses through to the spring. For those businesses not eligible for the grants, a £594 million discretionary fund is being made available by the Government as a matter of urgency. The new one-off grants come in addition to billions of pounds of existing business support, including grants worth up to £3,000 for closed businesses, and up to £2,100 per month for impacted businesses once they reopen.
**NEW** Business rates reliefs & Business rates repayments.... The Government will continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. Nurseries will also qualify for relief in the same way as other eligible properties. When combined with Small Business Rates Relief, this means 750,000 retail, hospitality and leisure properties in England will pay no business rates for 3 months from 1 April 2021, with the vast majority of eligible businesses receiving 75% relief across the year.
The Government will legislate to ensure that the business rates relief repayments that have been made by certain businesses are deductible for corporation tax and income tax purposes. This will ensure that these businesses are no worse off from a tax perspective than if they had paid the business rates in the first place. This will apply for repayments made to the devolved administrations as well as to those made in relation to England.
Furthermore a robust package of support has been introduced since the start of the pandemic. No pub or other business in the hospitality sector will be required to pay business rates in 2020-21. HMRC has made it easier to claim back the duty on any beer thrown away as a result of pub closures. I also welcome that the temporary reduction of VAT to 5 per cent has been extended by a further three months to the end of March 2021. Additionally, the Chancellor will defer VAT repayments through a new scheme until March 2022.
**NEW** Restart Grants... The Government will provide ‘Restart Grants’ in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses, giving them the cash certainty they need to plan ahead and safely relaunch trading over the coming months. The Government is also providing all local authorities in England with an additional £425 million of discretionary business grant funding, on top of the £1.6 billion already allocated. Altogether, this support will cost £5 billion. This brings the total cost of cash grants provided by the Government to £25 billion.
**NEW** Recovery Loan Scheme.... From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
Alcohol/beer duty
In 2013, the Government took the decision to end the beer duty escalator, and beer duty has been frozen or cut several times since then. Duty on spirits has been frozen over the past two years. As a result of these changes, a typical pint is cheaper than it would have been had these measures not been introduced.
Government is committed to reviewing the alcohol duty system and the Budget in March announcements to further support the hospitality industry and its suppliers, the duty rates on beer, cider, wine and spirits will be frozen for another year.
Reopening after lockdown...
From April 12, bars, pubs and restaurants will be allowed to open for outdoor drinking and dining. There will be no 10pm curfew in place or any rules regarding ‘substantial meals’.
From May 17, bars, pubs and restaurants will be allowed to start serving food and drink indoors again, with groups of up to six people.
