Horwich Advertiser Issue 608

April 2024 Page 23 AD SALES 01204 478812 THE chancellor announced an extension to the freeze on alcohol duty to February 2025 in the Budget, declar- ing that the government was backing “the great Brit- ish pub”. It is a move that has been wel- comed and will benefit 38,000 pubs across the UK. However, there have also been vocal calls for more support for the hard- pressed hospitality sector. And there was widespread dis- appointment that Jeremy Hunt didn’t go further and reduce the industry’s VAT burden. He also had nothing to say about busi- ness rates. Emma McClarkin, chief execu- tive of the British Beer and Pub Association, called the freeze good news for brewers, pubs and consumers, but has warned that the hospitality trade is on a “cliff edge”. She said: “This April brewers and pubs still face a £450million cliff edge of spiralling wage costs and business rates increases, particularly those pubs that are larger or food-led. “It is disappointing that the chancellor did not choose to go further with a cut duty, reduce VAT or cap the increase to the business rates multiplier which would have helped mitigate the huge cost of doing business. “Pressures on our sector remain acute with margins being squeezed to the point where we fear it is likely that a further 500-600 pubs are likely to close this year on top of the 530 that closed in 2023. “No government should turn a blind eye to the erosion of such an integral economic, social and cultural asset and it is vital that at the election the political par- ties commit to putting in place a fiscal and policy framework that will see our sector thrive for the long term and not continue to deteriorate”. She added: “We very much hope that the decision to cut National Insurance contributions for all workers by 2p in the pound will boost consumer spending power and encourage people to enjoy an extra pint in their local. “But I urge the government to look again at the urgent meas- ures needed to make the cost to doing business more affordable at the next fiscal event and through policy commitments made in the run up to the election to truly back the British pub.” The Heineken brewery also called for more help. A spokes- person said: “Licensees across the UK now need further help to thrive, in the form of long-term, fundamental reform to the busi- ness rates system which despite recent support still sees UK pubs overpaying by £400m.” Mr Hunt announced that fuel duty will remain at its current rate and be frozen for the next 12 months. And he has also extended the “temporary” 5p cut on fuel duty, which was set to end this month. The moves will help motorists and businesses with road trans- port overheads. In his statement Mr Hunt also revealed the OBR expects infla- tion to fall below the two per cent target in just a few months – a year earlier than forecast in the autumn statement. Alcohol freeze to back ‘the great British pub’ BUSINESS TO ADVERTISE CALL 01204 478812 £ IN a welcome development, chancellor JeremyHunt lifted the VAT threshold for small businesses in his statement. He announced that it would be increased from £85,000 to £90,000 from the beginning of April. It will be the first increase in seven years and the chancellor said the move would lift tens of thousands of businesses out of paying VAT. Announcing the move, Mr Hunt said it would help busi- nesses to grow and add that there was a need to “reward smaller businesses who make a big impact on our society and employ millions of people.” According to government offi- cials the increase will take about 28,000 small businesses out of paying VAT altogether. The Treasury said: “The government recognises that VAT can be a burden for some small businesses.” The Federation of Small Businesses (FSB) had called for the threshold to be raised to £100,000, describing the £85,000 figure as “a straightjacket to firms eager to expand.” In another of his announce- ments to help small businesses, Mr Hunt said £200m would be spent to extend the Recovery Loan Scheme. The VAT threshold increase and the cuts to self-employed NICs delivered by the chancel- lor were welcomed by the FSB, though it warned that firms still faced serious challenges. The organisation’s policy chair Tina McKenzie said: “We wel- come the increase in the VAT threshold as well as the cut to self-employed National Insurance Contributions (NICs). “Elsewhere, we were pleased to see a package of small busi- ness support in the Budget doc- uments, including commitments to make progress on the HMRC administrative burden and on the national roll-out of the Business Energy Advice Service, as well as extending the Recovery Loan Scheme under a new name - the Growth Guarantee Scheme. “Small firms are crucial for economic growth, and we were glad the chancellor has said that clearly from the despatch box. “That said, many of those run- ning businesses face serious chal- lenges – not least through rapid hikes in labour and input costs – and many will have understand- ably hoped that there would be more measures announced that would help ease the tough deci- sions small employers are having to make day-in day-out to keep their businesses going. “There’s still a real gap when it comes to the crunch small firms are facing – and the growth, jobs and economic security small busi- nesses provide is not something the country can afford to risk. “While keeping the £5,000 Employment Allowance for the 10th year in a row is invalua- ble, it should have been uprated to keep pace with the National Living Wage – especially if employer tax thresholds remain frozen. Government must not be over-confident on jobs and hours in this economic environment.” CHANCELLOR Jeremy Hunt unveiled significant property taxes changes in his Budget statement, aimed at stimulating the market. He announced both a capital gains tax cut and the abolition of tax relief on holiday lets. BUDGET SPECIAL Property tax changes aim to stimulate the market Easing the burden of VAT The higher capital gains tax (CGT) rate on residential property, currently at 28 per cent, will be reduced to 24 per cent in a boost for landlords. CGT on property sales is paid on non-permanent residences such as buy- to-lets, second homes and holiday lets. Mr Hunt said both the Treasury and the OBR agreed that the move would actually increase tax revenues over- all, as it would encourage more prop- erty sales. The CGT property rate will remain the same for basic rate taxpayers at 18 per cent. In a statement following the announcement, the government said: “Cutting the 28 per cent rate of CGT to 24 per cent is expected to incentivise earlier disposals of second homes, buy- to-let property and other residential property where accrued gains do not fully benefit from Private Residence Relief (PRR). “This will generate more transac- tions in the property market, benefit- ting those looking to move home or get onto the property ladder.” Meanwhile, the furnished holiday lets (FHL) regime, which offers tax advantages to those who let out a prop- erty as a holiday home, will be abol- ished in April 2025. The chancellor will also remove multiple dwellings relief. Mr Hunt said FHL was being scrapped because holiday lets reduce the availability of long-term rentals for people. Under the present rules, landlords can deduct the full cost of their mort- gage interest payments from their rental income and potentially pay lower capital gains tax when they sell. Around 127,000 properties in the UK are registered under the FHL regime. In other Budget announcements, a new excise duty will be introduced on vaping products from October 2026. ‘Non-dom’ tax status will be abol- ished and replaced with a residen- cy-based system. And a new tax-free British Isa will be created as part of efforts to encourage more investment in UK companies. In a statement the Treasury said: “The new £5,000 allowance, in addition to the existing ISA allowance, will pro- vide a new tax-free savings opportunity for people to invest in the UK, while supporting UK companies.”