Budget 2021: When Is it and What Will Rishi Sunak Say to Restaurants?
There are four main reasons that have kept restaurants from closing en masse over the past 12 months – support systems highlighted tonight, Friday February 26th, in a letter written by a group of high profile chefs and restaurateurs from the center London to the Ministers. The letter, written by St. John’s Trevor Gulliver ahead of the budget on Wednesday, highlights the need for Chancellor Rishi Sunak to extend business tariff relief and the temporary waiver of a tax tied to the value of a restaurant’s property. the lowering of the VAT rate from 20 to 5 percent; and the vacation program, where the state pays 80 percent of workers’ wages if they are unable to work due to the pandemic. It also stresses the need to find a solution to the rental crisis, although this is outside of Sunak’s remit.
While restaurants now have their “roadmap” for reopening – alfresco dining will return on April 12th while dining rooms can reopen on May 17th – the question remains whether they will have the fuel to power the needed cars get or not get there. “The problem with unfolding a large card for the first time is remembering how to fold it back up,” Gulliver wrote in his letter.
At this point, it seems completely implausible that Sunak will not extend some or all of the protections as restaurants are closed and their fate will be taken out of their own hands by the duration of Lockdown 3. But so far he hasn’t. In addition, the extent of their extension will not be known until next Wednesday, March 3rd, when Sunak will deliver his speech to the House of Commons at around 12:30 p.m.
“This letter is meant to remind you in the midst of all the noise. Obviously, the funding plans we were shown are not critical to the task at hand, ”Gulliver writes. “The London Town Roadmap takes funding, real funding, not prevention, and that budget needs to start with VAT, company rates, vacation, rental laws and all the other critical components for business. You have opened the card, it will upset many and it will be the cause of death for some. So you have to supply the ammunition for it to work. ”
It echoes the opinion of restaurant and pub trade organizations, both of which released statements this week calling on the government to expand these support systems. “The Prime Minister said he would not pull out the carpet and do whatever it takes. We will hold on to him and the Chancellor, ”said Emma McClarkin, executive director of the British Beer & Pub Association, on Monday. “Our sector will need more grant support … as well as extended vacation to save jobs for pubs that fail to open in April. Even if they open in May, the pubs need help on their long road to recovery by extending the VAT cut and easing business rates, as well as lowering the beer tax. “The time it would take to recover meant that support had to be extended by 12 to 24 months, she said.
UK Hospitality, a trade organization for restaurants, stressed the need to “grant an extension of the VAT cut and vacation with business rates” which “needs to be confirmed along with a targeted extension of the vacation system”.
Before next Wednesday, here is a reminder of the most important things to look out for. The questions restaurants and their staff are hoping for are answered so they can focus on reopening without worrying about whether or not they will even be able to reopen.
When are Business Rate Relief and the VAT reduced will expire?
Both the tax relief and the VAT cut currently expire on March 31, 2021.
As the testimony of three very different London restaurant owners shows, this represents a significant saving of money for companies that currently have very little of it.
Proposed extension: A consensus now seems to have formed around March 2022, although December 2021 was also proposed.
When does the vacation program end?
The vacation program currently ends on April 30, 2021.
Proposed extension: Unclear, although the government’s proposal was to extend it until the summer. It’s likely to be extended for at least three months to give employers some flexibility after restaurants can reopen indoors (in May).
After holding shtum for weeks and then messing with Gordon Ramsay, Sunak is under pressure to get restaurants exactly what they need as they set off on what they hope will be the final leg of their long Pandemic trip will be.