Following this week’s budget announcement by the Chancellor of the Exchequer, key points for the tourism and hospitality industry are:
National Insurance
The rate of employee National Insurance will be cut by 2% to 8% from April 2024.
Increase in VAT Registration Threshold for SMEs
SMEs will be supported to invest and grow through a £200 million extension of the Growth Guarantee fund, helping 11,000 small businesses to access the finance they need, and an increase in the VAT registration threshold from £85,000 to £90,000 which will take around 28,000 small businesses out of paying VAT altogether.
Tax Relief for Orchestras and Theatres
Orchestras, museums, galleries and theatres will benefit from a permanent 45% tax relief for touring productions and 40% relief for non-touring productions.
Alcohol Duty Freeze
The six-month alcohol duty freeze announced at Autumn Statement will be extended until 1 February 2025, saving consumers 2p on a pint of beer, 1p on a pint of cider, 10p on a bottle of wine and 33p on a bottle of spirit compared to if the planned rise had gone ahead. This will benefit 38,000 pubs across the UK, while reducing inflation this year.
Air Passenger Duty Rate Adjustment
A one-off adjustment to rates of Air Passenger Duty (APD) on non-economy passengers to account for high inflation in recent years and help to maintain the value of APD in real terms. For those in economy on domestic or short-haul flights, rates will remain frozen, benefitting more than 70% of passengers and keeping the cost of flying down.
Furnished Holiday Lets
The Furnished Holiday Lettings tax regime will be abolished from April 2025.
Amending Gift Aid legislation due to implications of the Digital Markets, Competition and Consumers Bill
The Digital Markets, Competition, and Consumers Bill is introducing new protections for consumers who take out subscription contracts. The government will amend existing Gift Aid legislation by Statutory Instrument so that charities can continue to claim Gift Aid while complying with these new protections. The government’s intention is that these amendments to the Gift Aid regime will be in place by the time the relevant provisions of the Bill come into force.
Community Regeneration Projects
The government is providing £6 million of funding for work with the King’s Foundation to pilot how community led regeneration projects anchored around heritage assets and sustainability considerations can complement government’s wider place-based initiatives for levelling up, subject to business case approval.
Culture Projects
£100 million of funding to be allocated to places such as British Library North in Leeds, National Railway Museum in York, and National Museums Liverpool. £15 million in funding was also announced to support culture, heritage and investment projects in the West Midlands.
VAT Retail Export Scheme
The government thanked the OBR for their review of the original costing of the removal of tax-free shopping. The government will consider these findings alongside industry representations and broader data and welcomes any further submissions in response to the OBR’s findings.
UK Growth Forecast
The British economy is forecast to grow by 0.8% in 2024, 1.9% in 2025, 2.2% in 2026, 1.8% in 2027, and by 1.7% in 2028.
Read the full Budget statement here: https://www.gov.uk/government/publications/spring-budget-2024
Industry Reactions
Visit West is a member of a number of national associations within the tourism industry. You can find reactions from some of these bodies using the links below:
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