BHA responds to Autumn Statement

Autumn Statement missed opportunity for British tourism

Today Philip Hammond announced his first Autumn Statement as Chancellor and the Government’s first fiscal announcement since the UK’s referendum on EU membership

Although Tourism VAT has not been cut, the BHA welcomes the reduction package confirmed for business rates transitional relief and tax relief for museums and galleries.

The chancellor is also increasing the rural rate relief to 100% which will have benefits for businesses in rural areas.

Key areas for Hospitality:

 Business Rates

  • Announced a £6.7 billion business rates reduction package over the next 5 years
  • Transitional relief cap reduced 45% next year to 43%, and from 50% to 32% the year after
  • The government is increasing rural rate relief to 100% from 1 April 2017

Museums and galleries tax relief

  • The government is extending the scope of the museums and galleries tax relief announced at Budget 2016 to include permanent exhibitions, making it more accessible to a wide range of institutions across the government.
  • The rates of relief will be set at 25% for touring exhibitions and 20% for non-touring exhibitions and the relief will be capped at £500,000 of qualifying expenditure per exhibition.
  • The relief will take effect from 1 April 2017, with a sunset clause which means the relief will expire in April 2022 if not renewed.
  • In 2020, the government will review the tax relief and set out plans beyond 2022.

Ufi Ibrahim, Chief Executive of the BHA said:

Ufi Ibrahim Chief Executive British Hospitality Association

Ufi Ibrahim
Chief Executive
British Hospitality Association

“The Government missed a wonderful opportunity to bolster hospitality and tourism - the UK’s fourth largest industry and employer of 4.5m people - by refusing to cut VAT on tourism.

It is a sure fire way to encourage more people, both domestic and foreign, to enjoy holidays here and would make the UK more competitive with our European competitors, the vast majority of whom have lower tourism VAT rates than us.”

“The UK’s hospitality and tourism businesses are already experiencing increased costs as a consequence of the fall in the value of Sterling with the price of building materials, cotton and imported food and beverages climbing.

This is a worrying trend at a time when Britain needs to be open for business and tourists alike.”

View the full Autumn Statement here.

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