Budget addresses NI payments and alcohol duty reform
Chancellor Kwasi Kwarteng has announced that the government will reverse the 1.25% increase in employer National Insurance (NI) contributions enforced in April this year.
In the Budget delivered in parliament today, the chancellor also addressed the matter of alcohol duty, saying: "I have listened to industry concerns about the ongoing reforms.
"I will therefore introduce an 18-month transitional measure for wine duty. I will also extend drought relief to cover smaller to cover smaller kegs of 20 litres and above to help smaller breweries at this difficult time."
He added that the government would not let alcohol duty rates rise in line with RPI, and that all planned increases in duty rates for beer, cider, wine and spirits will be cancelled.
The chancellor declared that dividends tax would also be scrapped as of 6 November. Mr Kwarteng claims the tax cut will benefit almost a million businesses across all sectors, with 28 million people saving an average £330 per year.
Trade body UKHospitality (UKH) says the announcement is "excellent news" for the sector and its customers, saving businesses an average £9,600 to fund new growth and development, on top of making on-trade occasions more affordable to consumers in the midst of a cost-of-living crisis.
UKH chief executive, Kate Nicholls, comments: "Hot on the heels of government support for businesses facing rising energy costs, cutting employer NI contributions (NICs) is more excellent news for the hospitality sector, and will help businesses reduce their costs as they attempt to return to profitability while facing a perfect storm of financial pressures, including the interest rate rise, VAT back to 20%, and the frankly unfair business rates regime.
"Cutting employee NICs is a great way to ensure people keep more of their money, primarily so that they’re able to pay their bills, and then to enjoy affordable luxuries, such as visiting hospitality venues.
"This announcement is particularly welcome, as UKH has long campaigned for an employer NICs regime that supports job creation, which this move will certainly help towards."
Other statements that affect the on-trade include the goverment's energy bill relief scheme that will reduce wholesale gas and electricity prices for all UK businesses. "This will provide a price guarantee equivalent to the one provided for households for all businesses across the country," said Kwarteng, referencing Prime Minister Liz Truss's September 8 annoucement of an annual £2,500 cap for households over the next two years.