Impact of March 2021 Budget on Tourism

The Tourism Alliance has summarised their understanding of the impact of the budget on tourism below –

General Economic Status

• 700,000 people have lost their jobs, the economy shrank by almost 10% last year
• OBR forecast is for GDP to grow 4% this year, then by 7.3% in 2022, and then 1.7%, 1.6% and 1.7% in the last three years of the forecast
• Unemployment predicted to peak at 6.5%
• The government is borrowing 17% of GDP this year
• Next year borrowing will be 10.3% of GDP

Coronavirus Support

VAT
• 5% rate extended for another six months followed by a 12.5% rate for a further six months

Business Rates
• 100% businesses rates holiday until June, followed by a two-thirds discount for the rest of the year.
• The discount is being capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
• The government will legislate to ensure that the business rates relief repayments that have been made by certain businesses are deductible for corporation tax and income tax purposes.

Furlough
• To be extended until the end of September at the 80% rate until July
• From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September,

Restart Grants
• Non-essential retail businesses will receive grants of up to £6,000 per premises.
• Hospitality and leisure businesses will get grants of up to £18,000.

ARG
• An additional £425 million of discretionary business grant funding, on top of the £1.6 billion already allocated.

SEISS
• People whose turnover has fallen by 30% or more will continue to receive the full 80% grant.
• People whose turnover has fallen by the left the 30% will therefore have less need of taxpayer support, and will receive a 30% grant.
• The 4th grant will cover February to April, worth 80% of average trading profits up to £7,500.
• A 5th grant will be available from July.

Recovery Loan Scheme
• From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million
• The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.

Support For Airports
• The government is renewing the Airports and Ground Operations Support Scheme for a further six months from the start of 2021-22. This will provide support for eligible businesses in England up to the equivalent of half of their business rates liabilities during 2021-22, subject to certain conditions and a cap per claimant of £4 million.

Extend Zoo Animals Fund
• The government will extend the Zoo Animals Fund for a further three months until 30 June 2021.

Culture Recovery Fund
• The government will provide a further £300 million to extend the Culture Recovery Fund

National Museums and Cultural Bodies
• The government will provide £90 million for continued support for government-sponsored National Museums and cultural bodies in England.

Other Policies

Extended Loss Carry Back
• The trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses.
o Unincorporated businesses and companies that are not members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22
o Companies that are members of a corporate group will be able to obtain relief for up to £200,000 of losses in each of 2020-21 and 2021-22 without any group limitations
o Companies that are members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22, but subject to a £2 million cap across the group as a whole

Contactless Payment
• From today, the maximum amount that can be paid through contactless payment will be raised from £45 to £100

Apprenticeships
• Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee.
• Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire

Corporation Tax Rate
• This will increase to 25% on April 2023
• A Small Profits Rate of 19% will apply to businesses with a profit of over £50,000
• There will be a tapered rate between profits of £50,000 and £250,000

Super Investment Tax Deduction
• To encourage investment, from 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will benefit from a 130% first-year capital allowance. This upfront super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest,

Air Passenger Duty
• APD rates will increase in line with RPI from April 2022

Alcohol Duty
• No increases this year

Fuel Duty
• No increases this year

Gaming Duty
• The government will legislate in Finance Bill 2021 to raise the Gross Gaming Yield bandings for gaming duty in line with RPI.

Infrastructure Bank
• A UK Infrastructure Bank will be established in Leeds with £12bn.

Freeports Announced
• Eight Freeports announced. They will be in East Midlands Airport, Liverpool, Felixstowe, Humber, Plymouth, Thames, Teesside, and Solent

Levelling Up Fund
• The government is launching the prospectus for the £4.8 billion Levelling Up Fund today.
• The Fund will invest in infrastructure, including town centre and high street regeneration, local transport projects, and cultural and heritage assets.

Community Ownership Fund
• a £150m fund will be set up to allow communities to take ownership of pubs, theatres, shops or sports clubs at risk of closure.

Community Renewal Fund
• The government is launching the prospectus for the £220 million UK Community Renewal Fund

Help to Grow: Management
• The government will offer a new UK-wide management programme to upskill 30,000 SMEs in the UK over three years. The programme will be over 12 weeks, and 90% subsidised by government.

More News

Tourism Society welcomes the government consultation on accommodation registration

The Tourism Society is pleased to support the government’s call for evidence on tourism accommodation registration, in response to the growth and impact of short-term holiday lettings.  We are encouraging...

Tourism Society welcomes Government response to De Bois Review of DMOs

The Tourism Society, the professional membership body for people working in all sectors of the visitor economy, welcomes the government response to the independent review of destination management organisations in...

The Tourism Society Welcomes a New Chair

The Head of Secretariat, Alison Cryer, of the Tourism Society is delighted to announce the new Tourism Society Chair Deborah Heather, who was elected at the 45th Anniversary AGM. Deborah...

Yorkshire Tourism – An update from Tourism Society Yorkshire chairman, John Gallery

As many colleagues will know, the destination marketing organisation (DMO) for Yorkshire, Welcome to Yorkshire, was placed into administration at the end of March 2022.   The lead up to...

Queen’s Platinum Jubilee Honours for Tourism

The following Honours were published yesterday.  Congratulations to all from the Tourism Society. Sally Jane Balcombe. Chief Executive, VisitBritain. For services to Tourism.  OBE Nicholas De Bois. Chair, VisitEngland Advisory...

Scots look at travelling to the Med again in 2022

After running the Scottish Tourism Index for several waves during the peak of the pandemic as a means of tracking the views of the Scottish population around holidays and breaks,...

Latest BVA/BDRC ClearSight survey on attitudes to travel & tourism

Summary of findings Air Travel & International Holidays back on the Menu The proportion of Brits booking an international holiday rose to its highest level in two years during January....

Featured in the latest Journal -Turning over a Green Leaf in the New Forest

Building a resilient, responsible and regenerative local visitor economy is crucial in a world experiencing economic crises, pandemics, and climate change.  Go New Forest has just launched its Green Leaf...

VisitBritain/VisitEngland CEO Sally Balcombe to step down

10 January 2022 VisitBritain/VisitEngland CEO Sally Balcombe has announced that she is stepping down from the role in spring this year. Ms Balcombe, who has been CEO, first of VisitBritain...

Geotourist – ‘one to watch’!

Tourism Society member, Geotourist, working with Historic Environment Scotland, has been named as ‘One To Watch’ at the World Responsible Travel Awards for their compelling platform concept that draws visitors...