How Will The 2018 Budget Impact Your Business?

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So, the Chancellor Philip Hammond has announced the 2018 Budget. From Brexit to austerity, the Budget outlines where the government plans to spend money to drive the country forward over the next 12 months.

The hospitality industry has long campaigned for relief from the government over business rates and a tax system which massively hinders the on-trade.

According to our pulse survey 62% of our customers don't believe the government is doing enough to help the hospitality industry  with just 10% satisfied by the government's efforts.

What's in the Budget? Good news for the hospitality industry, thankfully!

Beer Duty 

Beer duty will remain frozen for another year, saving 1p on a pint of beer, 2p on a pint of cider and 30p on a bottle of scotch or gin.

Wine, however, is raising to the rate of inflation.

No Plastic Cup Tax

Despite a huge push to go green with eco-friendly products, there will be no tax on plastic cups.

There is to be a tax on plastic packaging containing less than 30% recyclable plastic, but the Chancellor does not believe a tax on plastic cups will affect consumers' attitudes to recycling.

Digital Tax

Tech giants which generate £500m in revenue will be required to pay 2% tax on what they make from UK users, which will equate to £400m in raised taxes per year.

Why is this significant?

The Internet v High Street war has been unfairly tipped towards online retailers. This tax shows the government is serious about swinging the pendulum back towards the high street ... or at least finding a middle ground!

The Chancellor says he has implemented £12bn of business rates relief and that in 2021, business rates will be cut by one third for firms with a rateable value of less than £50,000.

This is part of a clear strategy to inject life back into the crumbling high street, which will be particularly helpful to small businesses.

Welcome news for pubs, bars and restaurants!

Mental Health

Mental health funding is increasing to 2 billion a year by 2023/2024. As society becomes more open to discussing mental health issues and removing the stigma attached to it, we can finally begin to tackle the issue.

Over 12% of sick days are attributed to mental health issues, equating to around 70 million working days and a cost of £2.4 billion a year to employers.

Over 10% of respondents to our pulse survey have worked with someone who had a mental health issue. Long hours and a stressful environment can find people more easily susceptible to mental illness. Considering we are only just beginning to see mental health become widely discussed, this is a large number and is likely to be much higher in years to come.

Therefore the government's affirmative action on mental health is a positive sign for the hospitality industry. The more support on offer for workers, the better your business can function.

Salary taxes

Your workers will receive a tax boost in April 2019 as the basic rate tax threshold rises from £11,850 to £12,500. At the other end of the scale, this rises from £46,350 to £50,000. More money in pockets of hardworking people is sure to lift morale and help people feel like they're being rewarded more for their efforts.

For employers, however, the National Living Wage will increase 4.9% in a bid to "end low pay". In our pulse survey, 14% of respondents said this is one of the biggest threats to their business.

Overall, a seemingly positive Budget for the hospitality industry. Though it must be said, the topic of Brexit was conspicuous in its absence.

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