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Budget 2021: New business rate relief to help hospitality recover
The Chancellor of the Exchequor has unveiled a new 50% business rate relief for the retail and hospitality sector to help business hardest hit by the pandemic.
In today’s budget, Chancellor Rishi Sunak announced that retail, hospitality and leisure sector would be able to claim a 50% discount on their bills up to £110,000 maximum for a year.
The tax cut worth £1.7 billion would benefit pubs, music venues, cinemas, restaurants. He pointed that, taken in conjunction with the existing small business relief, more than 90% of hospitality, retail and leisure businesses would see a discount of “at least 50%”.
“Apart from the Covid relief bill, this is the biggest single tax year cut to business tax in over 30 year,” Sunak told the House of Commons.
As part of a wider cut to business rates amounting to £7 billion, this would help to “unleash the dynamic and creativity of British businesses with a simpler, fairer and more competitive tax system,” he added.
However, Kate Nicholls, CEO of UK Hospitality said that as the business rates relief would be capped at £110k per company, that was the maximum that the rates bill can reduce. “While it will benefit many smaller businesses, this will limit the impact for larger premises and multi site businesses,” she said.
She applauded the Chancellor reform and simplification of excise duties but said that “we need that ambition brought to business rates. Moving from 5 to 3 year revaluations doesn’t really count as ‘root and branch reform’ as set out in 3 manifestos.”
She also highlighted that the big increase in the National Minimum Wage, amounting to 10% for 21-22 yr olds to £9.18, 12% for apprenticeship rates and youth rates for 16-20 year olds both rising by 4.1% would be a big increase for the hospitality sector where wages account for over half of all operating costs.
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