The Chancellor has promised the Welsh Government an extra £550m over the next three years, which we hope will have direct or in-direct benefits for tourism. Whilst being confident that there will be a Brexit deal, the Chancellor has also allocated an additional £500m to UK Government departments to enable them to plan for a ‘No Deal’ scenario, bringing the government’s investment in EU exit preparations to over £4 billion since 2016, so again some of this funding maybe used to boost the tourism industry across the UK including of course here in Wales.
Business Rates are a devolved issue in Wales where different rules apply, although the Valuation Office Agency (VOA) still retains control over aspects of Business Rates. It is therefore unclear at this stage as to how the following statement will actually impact on Wales?
Hammond announced that to ensure second properties are subject to the appropriate tax, the government will consult on the criteria under which self-catering and holiday lets become chargeable to business rates rather than council tax. We already have an additional rule in Wales to England, therefore maybe he will be adopting the Welsh rules which will then see parity between England and Wales?
He also announced that for the next two years, businesses with a rateable value of up to £51k will have their rates reduced by a third.
Tourism Taxation and the Living Wage - Something we have been calling for in the WTA, the introduction of a UK Digital Services Tax that will be targeted at tech giants, generating at least £500m in global sales and will come into effect in 2020 and is expected to raise £400m per annum. The tax will be a 2% of the revenues of search engines, social media platforms and online marketplaces. Fuel Duty will be frozen again, for the ninth year. Beer, spirit and cider duty frozen, however, there is the usual RPI increases on wine. The VAT threshold to be left at the current level of £85k for the next two years and work to be undertaken on how to remove the cliff-edge of VAT registration.
There will be no change in APD rate for short-haul flights and, in future, APD will be inflation indexed to inflation from 2020. Long-haul rates for APD will rise by £2 (£4 for non-economy classes) in 2019. E-passport gates to be opened up to citizens from the USA, Canada, Australia, New Zealand and Japan. This means that the KPI for waiting times will be reduced from 45mins to 25mins for these visitors.
The National Living Wage will increase from £7.83 an hour to £8.21in April 2019.
Sharing Economy - test for rent-a-room relief. Following consultation, the government will not include legislation for the ‘shared occupancy test’ in the Finance Bill 2018-19. The government will retain the existing qualifying test of letting in a main or only residence, and will work with stakeholders to ensure that the rules around the relief are clearly understood.
… And finally Owners will no longer pay business rates on public toilets.