Budget 2017 – Hammond announced a boost on rates for businesses
Cash strapped pub bosses and breweries have had their business rates cut by the Chancellor in today's budget but it's unlikely to solve the problems facing the sector which employs 900,000 people.
The average pub faces a business rates bill of nearly £15,000, and the average nightclub a staggering £26,000 each year and today Mr Hammond announced he is to offer a discount of 90 per cent of all pubs’ bills by £1,000.
The Chancellor introduced a permanent annual discount for publicans up and down the country while at the same time freezing increases on a pint – however the cost of a pint is likely to rise as previously planned increases get underway.
In many areas rates are now as expensive as rents, hindering high street regeneration and contributing to a high rate of business failure, exacerbated by the inability of local authorities to afford the discretionary reliefs they are theoretically able to offer.
Because of annual upratings, hospitality businesses have faced a 14 per cent increase in rates bills since 2010 while revenues have fallen.
In the same period, costs have increased due to legislation such as wage increases above the rate of sales growth, spiralling energy prices and above-inflation increases in alcohol duties.
Mr Hammond said however that he would not hit smokers harder this year by adding additional taxes nor would he do so on alcohol – but rises announced in November would still be implemented.
He said: “I am introducing a new minimum excise duty on cigarettes based on a pack price of £7.35…
“And I can also confirm that I will make no changes to previously planned upratings of duties on alcohol and tobacco”.
The BBPA commissioned Oxford Economics research group to look at the effect rises could have on the sector.
They revealed there would be ‘pot of gold’ for the Chancellor in raising beer duty.
The leading economic research organisation estimated that 5,300 jobs would likely be lost if the Chancellor raised duty, rather than cutting it by a penny, as done three times by George Osborne.
The duty freeze would safeguard 3,300 jobs, also at an exceptionally small net cost, of just £2 million, to the Treasury.
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On Monday it was revealed Brits are paying more than their European counterparts for a pint of beer.
British Beer and Pub Association Chief Executive, Brigid Simmonds said: “Our beer taxes are already three times the EU average, and pubs face big new cost challenges this year.
"British beer sales have stabilised since the abandonment of huge tax rises led to huge sales losses under the beer duty escalator. Any return to tax hikes would be a massive setback for the industry and the 900,000 people we employ.
“Instead, by continuing the sensible tax policy begun in 2013, the Chancellor can create confidence in this important sector, and bring cheer to pub-goers – and all at virtually no cost to the Treasury".
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