Whilst the most recent Autumn budget hasn’t caused significant conversation starters, it did include several important developments for the food, drink and hospitality sector.
First, the good news. The rise in the threshold at which retail businesses start paying business rates, accompanied by an extended taper arrangement, will be particularly welcome in Norfolk. Small Business Rates Relief threshold for retail, hospitality and leisure properties in England will increase from £12,000 to £18,000, with tapered relief available up to £21,000. These changes take effect from April 2027.
In addition to this, eligible businesses will also benefit from a two-year business rate real-terms freeze for 2027/28 and 2028/29. Pubs, social clubs and most live music venues will also receive further support, bringing their total relief to 35%.
The Budget is not entirely something to raise a glass to however. From 1 April 2027, the National Living Wage for workers will increase. In an industry where staffing already represents a significant proportion of expenditure, this increase will place further pressure on profitability and cash flow.
Alcohol duty rates will increase in line with inflation from February 2027; however, there is some welcome news for smaller producers, with £10 million of annual alcohol duty relief available to approximately 2,000 small British brewers and cider makers.
The Budget was also notable for what was not included: no shift in policy on the family farm tax, no mention of the imminent imposition of inheritance tax on pension pots, and no movement – even by the rate of inflation – in the £5,000 employer’s national insurance threshold which has been so damaging to many businesses. Further to this, the sector’s requested VAT reduction was also missing from the Budget.
Overall, there is some welcome support, but rising costs mean hospitality businesses may still be left picking up the tab.
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