After months of uncertainty and fear of catastrophic losses, pubs and restaurants in England are finally able to serve their customers. While hospitality businesses can currently only open outdoors as of 12th April 2020, it’s the first of many steps to recovery for the hard-hit sector.
Here, we take a look at what businesses like yours can do now to further aid that recovery, as we look forward to the end to COVID-19 restrictions scheduled for 21st June.
1. Adjust your payroll system for minimum wage changes
On 1st April 2021, the National Living Wage increased from £8.72 to £8.91 (a rise of 2.2%). This now applies to those aged 23 and over, adding roughly £350 to the annual pay of those working full-time. Employers will also need to make note of the new changes to National Minimum Wage for each age group, as well as apprentice rates and accommodation offset.
In the pre-pandemic economy, these increases may not have been such a big deal. However, in today’s uncertain world, this will inevitably create challenges for hospitality businesses – particularly those with a large number of employees. If you haven’t done so already, it’s a good idea to adjust your payroll system now. Doing so will ensure that you comply with the changes while giving you enough time to take action if necessary.
2. Claim the grants you’re entitled to
Of course, it isn’t all doom and gloom for the hospitality industry. A £5bn Restart Grant scheme was unveiled in the recent Budget announcement, designed to help hospitality and other struggling businesses reopen this summer. While non-essential retail can claim up to £6,000 per premises, hospitality and leisure (among other sectors) can apply for a grant of up to £18,000 from their local council.
The good news is that, unlike other grants, these don’t need to be paid back. That being said, they will be treated as profits and therefore may be subject to tax. Nevertheless, it won’t hurt to check if you’re eligible for the grant before you reopen your doors to the public.
3. Take advantage of the business rate holiday extension
The business rates holiday – originally set to end this month – has now been extended until 30th June 2021. This means that thousands of hospitality businesses have a little longer before they have to pay these rates again. From July 2021, and until March 2022, the business rates relief will reduce from 100% to 66%.
While this is fantastic news for many hospitality businesses, it’s worth noting that only those that were forced to close on 5th January 2020 will be eligible and it is capped at £2m per business. Because of this, some employers won’t receive the full benefit.
The government has also decided to extend the 5% VAT cut for hospitality and tourism businesses until 30th September 2021. And it won’t go back to 20% immediately either – rather, an interim rate of 12.5% will be introduced from September 2021, with the normal 20% rate returning in April 2022.
4. Seek professional advice
There are plenty of things you can do right now to prepare for full reopening this summer, though not everyone understands exactly what they’re eligible for or how to claim. If you need help figuring out what applies to you, or support with your accounting during these unprecedented times, we’re the team to turn to.
At Nabarro Poole, we help businesses like yours with everything from budgeting and forecasting to tax-efficient remuneration and succession planning. To find out more about the services we offer, simply get in touch with our team today. We’d be more than happy to support you.