Budget brings boost for hospitality, tourism and apprenticeships

The Chancellor of the Exchequer Rishi Sunak has unveiled a wide range of measures in his Budget 2021, which look set to benefit many in rural business.

From doubling apprenticeship payments to reduced VAT on the hospitality industry to business rates holiday extensions and corporation tax protection for smaller firms, there are more positives than negatives for many Game Fair exhibitors in this year’s Budget.

The Chancellor announced the five per cent reduced VAT rate for the hospitality industry will be extended until September 30th followed by an interim rate of 12.5 per cent for another six months.

The standard rate will not return until April next year and, according to the Chancellor, this makes for a £5bn cut in VAT.

In addition, the business rates holiday will be extended through to the end of June.

He said: “We’re going long, extending our support well beyond the end of the Roadmap, to accommodate even the most cautious view about the time it might take to exit restrictions.”

The Chancellor also unveiled a plan to double apprentice payments to £3,000 for all new hires, of any age. Not only that but a flexi-apprenticeship programme will allow people to work for a number of different employers in the same sector, boosting industry with easier working patterns.

He explained: “Over the course of the year, as the economy begins to recover, we are shifting our resources and focus towards getting people into decent, well-paid jobs.”

While he did announce a new Corporation Tax rate of 25 per cent, this would only apply to larger companies posting profits over £250,000 and won’t come into effect until 2023. It would also feature a taper above £50,000.

Firms with profits under £50,000 – that’s about 70 per cent of businesses or 1.4 million companies – would be “completely unaffected” by the rise.

Another key point of interest for rural communities was the pledge of £150 million to help communities take over pubs in danger of closure.

The Countryside Alliance was delighted by the continued VAT rate reduction for the hospitality sector, as it has been running its #Unlockinn campaign, designed to support the great British pub and get them quickly back in business.

Meanwhile, Mark Bridgeman, president of the Country Land & Business Association (CLA), which represents 28,000 rural businesses across England and Wales, said: “The extension of the five per cent VAT rate is a lifeline for many small tourism and hospitality businesses who have faced crippling consequences of the Covid-19 pandemic. It will allow tens of thousands of businesses breathing space to begin their recovery in 2021, further boosted by hopes of a bumper summer season as lockdown restrictions are eased further.

“But the extension is a short-term crisis response. Government should now begin thinking of how the UK’s tourism and hospitality sectors can thrive in the long term. If we are to compete with other major tourism destinations in Europe – all of whom have VAT rates far below 20 per cent – the UK’s VAT rate should remain at five per cent permanently. We estimate this move would add £4.5bn to the national economy, leading to more demand, more investment and more good jobs being created.

“The past 12 months has led to huge changes in the performance of many rural businesses especially in the leisure, hospitality and tourism sectors, with reduced turnover combined with extra costs of sanitisation. Therefore, an extension of the business rates holiday until the end of June is welcome news for the sector and is something the CLA has been lobbying intensively for.”

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