Budget 2013: Good news for hospitality businesses

Hospitality firms will be breathing a sigh of relief this year after George Osborne announced a series of changes that will benefit hospitality businesses.

A new ‘Employment Allowance’ will scrap the first £2,000 that employers have to pay through national insurance. This means that 450,000 small businesses will not need to pay any jobs tax.

The new changes are set to come in force in April 2014. Mr Osborne said: “The Employment Allowance shows that the way to restore our economic prosperity is to energise the aspirations of workers. If you want to work hard and get on, we are on your side.”

Further good news for businesses include the cutting of corporation tax to 20 per cent, which is actually the lowest tax that businesses have to pay in any major economy across the world.

The Budget also revealed further great news for pubs across the UK. Plans to raise alcohol duty by 6p and beer duty by 3p were both scrapped, and beer duty was actually cut by 1p per pint. The changes will come into effect on Sunday night (March 24th). However, wine, cider and spirits have seen rises of 10p, 2p and 35p respectively.

The Beer Duty Escalator, which was launched in 2008, causes increases of two per cent above inflation on beer tax. This means that beer tax has increased by a mammoth 50 per cent in the past five years. Many campaigners, such as the British Beer and Pub Association (BBPA) and the Campaign for Real Ale (Camra), have argued that this has caused 6,000 pubs across the UK to shut, meaning that 62,000 hospitality jobs have been lost. 

George Osborne added: "I intend to maintain the planned rise for all alcohol duties with the exception of beer. Instead of the 3p rise, I am cancelling the Escalator altogether – that’s the freeze people have been waiting for.”