Balancing pub support with broader SME incentives
The Government has faced strong criticism following the November 2025 Budget from their own backbenchers and the hospitality sector, with many business owners warning that mass closures and job losses could result from the measures announced therein.
This pressure resulted in the Government making a partial U-turn and announcing an economic support package, primarily aimed at the hospitality sector with specific inclusion for pubs and live music venues. These types of venues were granted financial relief by way of an immediate 15% cut to new business rates bills for the 2026-2027 financial year and an additional £10 million worth of funding allocated to the Hospitality Support Fund over three years.
Whilst the ‘Pub Rescue’ package appears highly specific, there were support measures announced that could benefit all businesses — albeit these appear in the form of tax reliefs and investment incentives, rather than immediate cash relief.
The most significant benefit for general businesses will be the introduction of the 40% First-Year Allowance (FYA) — effective from 1st January 2026 (for those subject to paying corporation tax) and 6th April 2026 (for sole traders and partnerships subject to paying income tax). This new permanent tax relief allows both incorporated companies and unincorporated businesses (sole traders and partnerships) to deduct 40% of the cost of new plant and machinery from their taxable profits in the first year. Unlike previous ‘full expensing’ rules, the new FYA includes assets purchased for leasing, providing a significant boost for equipment rental and logistics firms.
In terms of investment, the Chanceller announced the Government had finalised an agreement with five major banks (Barclays, HSBC, Lloyds, NatWest, and Santander) to provide £11 billion in funding specifically for small and medium-sized enterprises (SMEs). Alongside this, a new single point service has been launched to provide government advice and funding for SMEs.
A new initiative focused on AI development and adoption was announced, designed to practically support SMEs in the use of this new technology.
Regarding employment, small businesses can now benefit from an increased Employment Allowance of £10,500 (up from £5,000), allowing firms to employ up to four full-time workers on the National Living Wage without paying employer National Insurance contributions.
To aid with cashflow and debts, Chancellor Rachel Reeves introduced a new legislation (Late Payments Reform) to tackle late payments in a move intended to protect the cash flow of 5.5 million small businesses across all sectors.
If you’d like to find out more about how the Chancellor’s ‘Pub Rescue’ package might pragmatically benefit your business, please feel free to contact us on 020 8878 8383 or via email on info@whitehartassociates.com.
