Rishi Sunak’s 2021 Budget Extends Covid Grants and Tax Cuts
Chancellor Rishi Sunak used his budget today, Wednesday March 3rd, to announce that the VAT cut and the holidays will be extended at business rates that have increased the restaurants’ chances of survival. He also confirmed the extension of the vacation program and a new set of catering grants – measures designed to be in line with Prime Minister Boris Johnson’s reopening of Prime Minister Boris Johnson’s “roadmap” that restaurants will be closed until April 12th and will not be fully open until April 12th will be June.
Below is a summary of the measures that are relevant for restaurants, pubs, bars and cafes and that the Chancellor announced in the House of Commons at lunchtime. In short, it’s broadly what was hoped for, if not expected.
- The valuable VAT rate of 5 percent for food and non-alcoholic beverages (not alcohol) will be extended by six months to September 30th.
- Starting in October, companies will have to pay a VAT rate of 12.5 percent for six months.
- A return to the standard rate of 20 percent will take place in April 2022.
- A continuation of the vacation business rates – a tax on the value of a property – through June 2021
- Business tariffs will then be calculated at 33.3 percent (with a discount of two thirds on the pre-pandemic level) up to a value of GBP 2 million until the end of March 2022. A lower limit applies to restaurants that could stay open.
Alcohol tax (tax)
- A planned hike in tariffs on beer, wine and spirits will be frozen for another year, meaning pubs and restaurants are technically not geared towards saving money on alcohol sales.
- Confirmation that the Coronavirus Job Retention Scheme (CJRS) (commonly referred to as “Vacation”), introduced in March last year, and a key support mechanism for restaurant owners and their employees during the pandemic, will be extended to the end of September.
- The system remains unchanged for the months of May and June. The government covers 80 percent of wages up to a value of £ 2,500 per month for those disabled (excluding the expensive national) due to the pandemic with insurance and pension contributions.) For the month of July, the government will ask employers to Contribute 10 percent of that 80 percent, in August and September to 20 percent.
- A package of “Recovery Grants” valued at £ 8,000-18,000 per building to support restaurants, pubs, bars and cafes that will gradually reopen after the lockdown on April 12th.
- The grants are allocated to businesses based on the value of their property: properties with a pro rata value (ie estimated annual rent) of £ 15,000 or less receive £ 8,000; For anyone valued between £ 15,000 and £ 51,000, the grant is £ 12,000. and those valued at £ 51,000 or more are eligible for a grant of £ 18,000.
- Nothing yet about the biggest cost and worry for restaurants, pubs, cafes and bars.
The British trade organization Hospitality broadly welcomed the budget with the words: “The Chancellor has listened to the concerns of the hospitality industry. Details have yet to be clarified, but it looks like the crucial support will help companies at a critical time. “Rather than pushing for further support over the past few weeks, it has instead focused on maintaining current support and pushing for reopening dates to remain unchanged.