Breaking Budget News


The UK’s beleagured pubs will be heartened by the news that the Chancellor has cut the unpopular Beer Tax Escalator and in addition, has taken a penny off the price of a pint!

This will be paid for by big tax rises on wine and spirits, George Osborne announced in today’s Budget.

“We will now scrap the beer duty escalator altogether,” he said. “And instead of the 3p rise in beer duty tax planned for this year I am cancelling it altogether. That’s the freeze people have been campaigning for. But I’m going to go one step further and I am going to cut beer duty by 1p. We’re taking a penny off a pint. The cut will take effect this Sunday night and I expect it to be passed on in full to customers.”

Brigid Simmonds, BBPA Chief Executive, commented, “This is absolutely brilliant news, and it will make George Osborne the toast of Britain’s pubs today. By cutting the tax on beer, he has moved to boost jobs in Britain’s pubs at a time when it is most needed.

“In also abolishing the Beer Tax escalator, the Chancellor has ended a hugely damaging policy that would have made Britain’s’ beer the most heavily taxed in Europe.

“This will protect thousands of jobs this year, and will allow us to create many new jobs in this brilliant industry.

“I want to pay tribute to the hundreds of thousands of people who have supported this campaign. This has been a broad and persuasive campaign uniting the industry and consumers. I hope this heralds the start of a long term change that recognises the benefits of beer and pubs, for the economy, and for society.”

As expected the Chancellor also scrapped a planned 3p rise in fuel duty in September and said that no-one earning less than £10,000 would pay income tax from April next year.

He also announced the Employment Allowance which may help small businesses such as arcades. “To help create jobs and back small businesses in this country I am today creating the Employment Allowance,” said George Osborne. “The Employment Allowance will work by taking the first two thousand pounds off the employer National Insurance bill of every company. It’s a tax off jobs. It’s worth up to £2,000 to every business in the country. They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs.

Mr Steve Hawkins, BACTA’s President responded on behalf of BACTA, representing the British amusement industry. ‘We welcome the announcement that the Government is not intending to increase the proposed rates of Machine Games Duty (MGD) in 2013. However, we believe that it is a missed opportunity not to have reduced the top MGD rate to 15%, nor to have allowed businesses to net off irrecoverable VAT from their new MGD liability. The change in the tax regime was not designed to increase the tax burden, however, because businesses will no longer be able to reclaim VAT on their underlying operational costs, such as machine purchases, utilities and refurbishment, the effective tax rate for many small businesses will cause further closures.

Since 2007, over 300 traditional seaside arcades have closed, machine manufacturing has declined by over 55%, 18 British pubs are closing per week and tens of thousands of jobs have been lost. The British amusement industry consists of 1,000 companies directly employing in excess of 26,000 people around the UK, and is a vital part of the country’s traditional tourism sector’.

Leslie MacLeod-Miller, BACTA’s Chief Executive said ‘While the government has increased the tax burden on small UK family businesses, the Treasury have failed the British public by not introducing taxation for offshore gambling companies in this Budget. HMRC have lost more than £2.1 billion in lost gambling revenues in the last 7 years and their failure to prioritise taxation of offshore companies will mean that essential services are cut so that offshore companies can increase their profits. The government did not require complex legislation or a 12 month delay to publically demand that Starbucks and Amazon paid a fair amount of tax. It is difficult to understand why Treasury is placing foreign corporate profits above protection of basic social services for the British public. We call upon the Minister to act without further delay’.

But the eye-catching initiatives masked grim economic news. After just three months the Office of Budget Responsibly has cut its forecast for growth by half from 1.2 per cent to just 0.6 per cent.

Borrowing will be £61.5 billion higher than planned while national debt will reach a staggering 85 per cent of GDP and will not start falling until 2017 a year later than planned.

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