It’s a time of year when industries gird their loins as they await the Chancellor’s Budget pronouncements and what they will mean for their businesses, staff and customers.
Monday is generally regarded as having been a good day for the hospitality sector with a positive or at least neutral impact on employment costs, business rates, excise duty, the latte levy and non-residential capex and investment allowances.
UKHospitality, the trade body, estimated that measures introduced by Phillip Hammond are likely to save the industry around £750m.
As a Glasgow-based jobs agency focused on the hospitality industry, we know that many small businesses have been devastated by spiralling business rates costs, so steps to address this were particularly welcome.
Mr Hammond declared he will be cutting the business rates bill for the smallest of small businesses so those with a rateable value of £51,000 or less will see their bills cut by a third over a two-year period, amounting to as much as £8,000 of savings.
Of course, that only applies to businesses south of the border. In Scotland business rates are worked out using the rateable value set by the local assessor and the poundage rate is set by the Scottish Government.
Nicola Sturgeon has the option of mirroring these measures for businesses here and, as a Glasgow recruitment agency we are concerned that, on this issue, she has mixed form.
Last year when the Chancellor introduced stamp duty relief for first time buyers in England, the First Minister followed suit, meaning that people buying their first home in Scotland are now spared the Land and Buildings Transaction Tax (LBTT) if their property is worth £175,000 or less.
This year, however, there are signs things may be different which is worrying for us as a Glasgow employment agency.
While the Scottish Government is likely to raise the personal tax allowance to £12,500, in line with Westminster for example, ministers have signalled the higher tax rate threshold will remain at £43,001, significantly less than the new £50,000 level that will exist in the rest of the UK.
Many will welcome Holyrood going its own way on this. We Scots like to think of ourselves as egalitarian and redistributive, so why should we give tax breaks to higher earners when, at a time of continued austerity, every advantage possible should be given to those at the bottom, we might ask.
But we might also recognise that small businesses, including many family run restaurants, cafes and bars, are the lifeblood of our communities as well as major generators of employment and income for our local economies and those in Scotland need as much of a leg up as they do in the rest of the UK.
Cutting bills for smaller businesses by a third will provide some much-needed support and along with the introduction of a new tax on digital businesses to ensure they pay their fair share, will hopefully provide a springboard for further businesses rates reform.
Other pro-business measures introduced by the Chancellor include:
- A £675 million will be put towards a Future High Streets Fund
- Small businesses will now only have to contribute five per cent to the apprenticeship levy
- New mandatory business rates relief for all toilets made available to the public, whether publicly or privately owned
- The VAT threshold won’t change
Let’s hope that on these, and other measures, the Scottish Government remembers the important role played by the small business sector in Scotland in generating employment and prosperity.