Chancellor Announces 'Trailblazer' Deal for North East

Chancellor Jeremy Hunt this week announced the latest Budget, following the famous photo opportunity clutching the red box outside Number 11 Downing Street.

Within the various measures announced was a 'trailblazer' deal to deepen the North East's devolution deal, unlocking vital funds to support the creation of a major centre for TV and Film production on the banks of the River Wear alongside an increase in the threshold that SMEs will have to reach before being required to pay VAT, adjustments to Air Passenger Duty for Business Class travellers and the continuation of tax relief for theatres and orchestras.

We've highlighted some of the visitor economy headlines from yesterday's budget below.

Trailblazer North East Devolution Deal

As part of the Budget, the chancellor detailed what the government is calling a 'trailblazer devolution deal' to deepen the existing devolution deal agreed with the region's local authorities. Subject to ratification by all of the parties involved, it will give extended powers to the new mayor to make decisions that affect local businesses and communities, providing new levers to unlock opportunities, level up the region and raise living standards for North Eastern communities.

The extended deal means funding has been secured to make the ambitious and transformative Crown Works Studios on the banks of the River Wear, overlooking the Northern Spire bridge a reality. It means the North East will become a major destination for film and high-end TV production, which will equip the region with the tools to enable the creation of one of Europe's largest filmmaking complexes, in Sunderland.

A summary of the deal can be found here.

Increase in VAT Registration Threshold for SMEs

SMEs will be supported to invest and grow through a £200 million extension of the Growth Guarantee fund, helping 11,000 small businesses to access the finance they need, and an increase in the VAT registration threshold from £85,000 to £90,000 which will take around 28,000 small businesses out of paying VAT altogether.

Tax Relief for Orchestras and Theatres

Orchestras, museums, galleries and theatres will also benefit from a permanent 45% tax relief for touring productions and 40% relief for non-touring productions. This permanent tax relief will help make touring major spectacles like Disney's The Lion King and west-end smash hit Wicked to the region's amazing live venues more viable and financially sustainable, opening up opportunities foe world-class productions to make their way north.

Alcohol Duty Freeze

The six-month alcohol duty freeze announced at Autumn Statement will be extended until 1 February 2025, saving consumers 2p on a pint of beer, 1p on a pint of cider, 10p on a bottle of wine and 33p on a bottle of spirit compared to if the planned rise had gone ahead. This will benefit 38,000 pubs across the UK, while reducing inflation, the government hopes, this year.

Air Passenger Duty Rate Adjustment

A one-off adjustment to rates of Air Passenger Duty (APD) on non-economy passengers to account for high inflation in recent years and help to maintain the value of APD in real terms. For those in economy on domestic or short-haul flights, rates will remain frozen, benefitting more than 70% of passengers and keeping the cost of flying down. Great news for those arriving into the region via Newcastle International Airport's domestic routes.

Furnished Holiday Lets

The Furnished Holiday Lettings tax regime will be abolished from April 2025, something which many hoteliers and small accommodation providers will be pleased to see in the region.

VAT Retail Export Scheme

The government is grateful to the OBR for their review of the original costing of the removal of tax-free shopping. The government will consider these findings alongside industry representations and broader data, and welcomes any further submissions in response to the OBR’s findings.