Chris Maloney, Head of Hospitality and Leisure at Menzies LLP, shares his predictions for next week’s budget.
Now is not the right time for the Chancellor to increase corporate taxes or cut incentives for business owners. This will not provide support for the struggling hospitality and leisure sector in preparing for a post-pandemic bounce back.
Given many businesses within this sector have been forced to close for the majority of the last year, the following COVID related schemes will be extended:
- VAT reduction to 5%
This is due to come to end on 31 March 2021. The hope is that this will be extended for another 12 months. It will be interesting to see if any ‘eat out to help out’ style schemes are announced once we emerge from the current lockdown
- Business rates holiday
We hope to see the business rates holiday continue for the sector until March 2022.
- Furlough scheme
The current furlough scheme, which is due to come to an end on 30 April 2021, will continue until the summer, to help protect businesses and jobs.
There are some further areas we feel could be of benefit to hospitality and leisure businesses:
- Amending corporation tax loss relief rules
The current corporate tax loss relief rules could be amended to allow losses incurred during the pandemic to be carried back for a longer period than just one year, that may lead to a tax refund
- Extending the repayment period for loans
The businesses within the sector, the repayment period on Government backed loans could possibly be extended from 6 to 10 years
- Top-up grants
It would be good to see a further top up grant being offered to businesses in the sector, following the grant of up to £9,000 per property being announced at the beginning of 2021
- Annual investment allowance
An extension of the Annual Investment Allowance to £1 million is in place to 1 January 2022. The Chancellor could maximise this by increasing the limit, or perhaps make more structural costs eligible too.