Furlough scheme and low VAT rates extension welcomed by hospitality
Relief for tourism sector as long term concerns remain for entrepreneurs
MEASURES to protect the hospitality and business sectors will go a long way to keeping places afloat - but a tough few months still lie ahead.
Entrepreneurs in the tourism and hospitality sector have welcomed the government’s extension of the five per cent VAT and the furlough scheme.
But as the country begins to open up slowly they acknowledge there is a long way to go.
Antoinette Stretton has been the owner of Seacrest Hotel in Southsea for 35 years, and says this has been the toughest period she has ever experienced.
She said: ‘Everything announed by Rishi Sunak has been good news and I am quite relieved that the VAT has been extended until the end of September.
‘Anything the government can do to help us get over the line is great, but we’re not out of the woods yet.
‘When we reopened last year things were really slow for the first couple of months, and I think it’s going to be the same for us again this year.
‘The only bookings we have are around Victorious Festival and the Goodwood Festival of Speed, so it could still be a bad year – the more help we can get, the better.’
After September, an interim VAT rate of 12.5 per cent will be introduced for a further six months.
Faz Ahmed, owner of The Akash restaurant in Southsea, says this is good news for restauranteurs, but remains concerned about the long-term future.
He said: ‘The VAT reduction is helping a lot right now, because you have to pay it regardless of whether you make a profit or not.
‘We have staff on furlough so extending that is certainly a good thing, but I’m surprised it will be available until the end of September because I assumed we would be done with Covid-19 by then.
‘I’m happy with everything that has been implemented in the short-term, but the longterm future is something I’m still apprehensive about.
‘Corporation tax is going to go up and I see that being increased further in the years to come.’
Director at Hampshirebased accountancy firm HWB, Michaela Johns, agreed that a note of caution was needed.
She said: ‘Overall the budget statement is good news for business and hearing that entrepreneurs' tax relief remains intact, will be particularly welcomed.
‘The super-deduction allowances that will enable companies that invest to reduce their tax bill, will also positive there will be more complication around corporation tax with rates going up and there being a taper between small and large profitable businesses.
‘UK debt is going to be increasing for some years yet and it doesn’t look like the amount collected via corporation tax will tackle that.’
Anything to help us get over the line is great, but we’re not out of the woods yet.
Antoinette Stretton