UK pubs play a vital role, supporting not only the economy but our local community. After nearly two difficult post-pandemic years, the Government is committed to supporting them.
Through the Energy Bill Relief Scheme (EBRS), the Government provided a discount on wholesale gas and electricity prices for all non-domestic customers whose bills have been significantly inflated in light of global energy prices until 31 March 2023.
The EBRS has now been replaced by the Energy Bill Discount Scheme (EBDS) which will run until March 2024. The EBDS will support businesses and other non-domestic customers by providing a discount on gas and electricity unit prices. Eligible consumers will receive a per-unit discount to energy bills during the 12-month period from April 2023 to March 2024. The relative discount will be applied if wholesale prices are above a certain price threshold. For most non-domestic energy users in Great Britain and Northern Ireland these maximum discounts have been set at:
- electricity - £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
- gas - £6.97 per MWh with a price threshold of £107 per MWh
The Government's long-term strategy for the hospitality sector includes an extension to pavement licences, making it easier and cheaper for pubs, restaurants and cafes to make outdoor dining a reality. This will be implemented through the Levelling Up and Regeneration Bill. Additionally, the £150 million Community Ownership Fund allows community groups to buy assets so that they can continue to serve their local area. I am aware that rural pubs were among the local assets allocated funding in the scheme's first round, giving them a new lease of life for generations to come.
Moreover, small businesses will be shielded from most tax rises and will be protected from increases through the Small Profits Rate and Employment Allowance. This means only the largest ten per cent of companies will pay the top rate of Corporation Tax and 40 per cent of all businesses will be unaffected by the freeze in National Insurance thresholds. Finally, there is also a £13.6 billion package of support. To protect businesses from rising inflation the multiplier will be frozen in 2023-24 while relief for 230,000 businesses in retail, hospitality and leisure sectors was also increased from 50 per cent to 75 per cent this year.
To protect small businesses the Government will keep the Small Profits Rate, maintained at the current 19 per cent rate, for companies with profits less than £50,000 – meaning nearly 70 per cent of companies will be completely unaffected. There will also be a taper above £50,000, so businesses only start paying the full rate of 25 per cent on profits from £250,000. This means that 1 in 10 companies will pay the full 25 per cent rate.
Further, a systematic review into taxes paid by smaller businesses and a consultation to expand the ‘cash basis’ will be conducted – a simplified way for four million sole traders to calculate and pay their Income Tax. The Government has also announced a range of measures to simplify customs import and export processes for small businesses.
For small businesses not applying the cash basis, the Annual Investment Allowance provides 100 per cent first-year relief for plant and machinery investments. From April 2023, this has been permanently set at £1 million, simplifying the tax treatment of capital expenditure for 99 per cent of businesses. Larger businesses will benefit from full expensing for the next three years, simplifying claims and investment decisions.