Spring Statement: Key Tourism Points

Tourism Alliance has summarised the Spring Statement with a quick briefing of the main announcements that will be of interest to tourism businesses.

General Economic Status

• UK economy will grow by 3.8% this year followed by 1.8% in 2023, and then 2.1%, 1.8% and 1.7% in the following three years.
• Inflation will average 7.4% this year before dropping to 4% in 2023 and 1.5% in 2024
• The unemployment rate will be 4.5% this year, dropping to 4.0% next year and remaining stable at 4.1% for the next three years
• Government debt will be 96.3% of GDP this year before slowly falling to 89.4% in 2026/27

Key Tourism Related Announcements

Fuel Duty

• From 6pm this evening, the Government will reduce main rates of petrol and diesel by 5p per litre, and other rates proportionately for 12 months.

VAT

• A VAT rate of 0% will be applied to energy-saving materials materials, such as solar panels or heat pumps.

National Insurance

• The annual National Insurance Primary Threshold and Lower Profits Limit, for employees and the self-employed respectively, will increase from £9,880 to £12,570 from July 2022.
• From April, self-employed individuals with profits between the Small Profits Threshold and Lower Profits Limit will not pay class 2 NICs

Employment Allowance

• From April, Employment Allowance will; be increased from £4,000 to £5,000 As a result, businesses will be able to employ four full-time employees on the NLW without paying any employer NICs

Personal Income Tax

• The basic rate for personal tax rate will decrease from 20% to 19% from April 2024

Green Reliefs For Business Rates

• At Autumn Budget 2021 the government announced the introduction of targeted business rate exemptions from 1 April 2023 until 31 March 2035 for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible low-carbon heat networks with their own rates bill, to support the decarbonisation of non-domestic buildings. The government is bringing forward the implementation of these measures and is announcing that they will now take effect from April 2022.

R&D Tax Reform

• From April 2023, all cloud computing costs associated with R&D, including storage, will qualify for relief.

Levelling Up Fund – Second Round

• The government is launching the second round of the Levelling Up Fund and is  publishing a refreshed Prospectus, inviting bids from all eligible organisations.

Changing Places Fund Increased

• A further £25.3 million has been allocated to install over 500 Changing Places toilets in public places and tourist attractions.

Arms Length Bodies Review Guidance

• The government will publish guidance for a new series of reviews of ALBs. These reviews will scrutinise the work and effectiveness of particular ALBs, aiming to deliver savings for the taxpayer of at least 5% of resource DEL budgets. (this one is of interest because VB and VE are Arms Length Bodies)

Read the full Spring Statement here