The chancellor at the exchequer Jeremy Hunt won’t be extending business energy relief as part of the government’s spring-budget – a move which could cause trouble for the gaming sector.
Many businesses in the land-based and retail gambling industry have been under tremendous pressure due to the rising cost of energy. The Betting and Gaming Council (BGC ), an industry trade group, called for the government to address the rising prices because of the potential “catastrophic” impact it could have on the industry.
Industry reaction to the budget was mixed. John White, Bacta CEO, praised certain aspects of the government plan but criticized steps that were not taken.
White stated, “We are pleased by the chancellor’s commitment to enterprise growth and while the 100% capital allowances will help our hard-pressed industry, but this was a missed chance to correct some key unfairnesses in our tax system.”
White lamented the lost opportunity to reform the gaming tax structure.
He stated that Jeremy Hunt should have allowed operators who pay Machine Game Duty (MGD), to reclaim VAT, and to adjust the MGD tax boundaries so that machines at lower stakes can pay 5% tax instead of 20%. “We hope that the assistance with childcare will give a boost the labour market, as we, like many sectors, struggle to recruit and retain employees.”
Energy bills
Energy bills across Europe have risen since the start of the war in Ukraine. This is due to a decrease in Russian natural gas supplies. The government announced the energy bill relief program in September. This scheme caps energy bills for non-domestic customers by establishing a guaranteed wholesale price.
This program was due to expire at March 31st, and will be replaced by the energy discount scheme. It was much less generous than the old scheme. The new system will not have a price cap and businesses will only be offered a discount if prices exceed a certain threshold.
The chancellor decided to extend energy assistance for households for three more months beyond April, when the scheme was due to expire. This has not been extended for businesses, as they will continue beyond March without any assurances about a price cap.
Spring budget
The chancellor confirmed that the increase in business taxes from 19% to 25 percent, first announced in Autumn, will take effect in April.
Hunt also announced a new system called “full expense,” which allows businesses to write off the entire cost of an investment in the UK against their tax bills. The initial program is expected to last for three years. However, the government plans to make the measure permanent if fiscal conditions permit.
