Business rates will be cut by 50 per cent in 2022/23 for firms in the hospitality, retail and leisure sectors, Budget 2021 documents have revealed.
The Chancellor Rishi Sunak said the move will support the businesses hardest hit by the coronavirus pandemic, such as pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms.
According to the report, the temporary 50 per cent cut in business rates will be capped at a maximum saving per business of £110,000 – a tax cut worth almost £1.7 billion.
In combination with the existing Small Business Rates Relief, it means that over nine in 10 (90 per cent) eligible firms will receive a discount of at least 50 per cent.
The move will also apply to high street personal care businesses, such as hairdressers and nail salons.
While limited to England for now, the devolved nations – Wales, Scotland and Northern Ireland – can choose to adopt the relief, or keep the current rate of business rates and spend the money elsewhere.
On top of the cut, the planned annual increase in business rates for all firms will be cancelled for the second year in a row.
The hospitality industry welcomed the move, but said the true extent of the support provided will become clearer after full details of the scheme have been published.
“We have been lobbying hard for significant reform of the outdated business rates system and therefore very much welcome the chancellor’s move today to extend the 50 per cent business rates relief for the hospitality and leisure sector for the next financial year,” said UK Hospitality chief executive Kate Nicholls.
“The devil will be in the detail, though, so we look forward to learning to what extent it will benefit businesses.”
The hospitality sector will also be supported by reducing the rate of duty levied on draught beer and cider and simplifying the alcohol duty regime.
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