Last-gasp appeals for help in Spring Budget

05-Mar-2024 - Last updated on 05-Mar-2024 at 11:22 GMT

Power house: the sector is calling for help from the Conservative-operated Government (credit: Getty/Robert Ingelhart)

One trade body has claimed Government action to help the hospitality sector in the Spring Budget is “absolutely essential”.

UKHospitality (UKH) chief executive Kate Nicholls said: “As the UK’s third largest employer, contributing more than £93bn to the economy each year, it’s absolutely essential the Government takes action at the upcoming Budget to provide economic support to protect over 3m jobs and ensure that UK’s hospitality industry retains its status as a world-leading sector.

“To prevent irreparable damage to pubs and venues across the sector, UKHospitality is calling for a cap on business rates increases at 3% from April 2024 to prevent further cost pressures with the current rate of inflation, a reduced rate of 12.5% VAT for hospitality, leisure and tourism, and to relieve cost pressures on businesses by introducing a temporary cut in the lower rate of employer national insurance contributions to 10%.

“We also urge the Chancellor to freeze draught beer and cider duty rates to minimise costs through the supply chain and again help businesses to manage their rising costs.”

Fair taxation

Meanwhile, Steve Alton, CEO of the British Institute of Innkeeping (BII), said its members continue to face a continued “perfect storm” of inflation, wage rises, high energy prices and the impact of the cost-of-living crisis on their customers.

He said: “We have consistently called for support and investment from Government, levelling the playing field to give pubs the fair taxation that they deserve, as bricks and mortar businesses at the heart of their communities.

“Our diverse membership has been affected in different ways by the current challenges facing the sector depending on their business models, but the vast majority agree that a cut to the rate of VAT would stimulate growth, consumer confidence and allow them the breathing space to plan and invest in the future of their businesses.”

Alton explained data from BII surveys and constant communication with licensees via its membership team has allowed the trade body to take their voices to the Government via MP Kevin Hollinrake (Parliamentary Under Secretary of State (Department for Business and Trade)) and Treasury officials who the BII told recently about the challenges directly from key operators at multiple roundtables.

“We need Government to recognise and invest in our vital sector that provides huge social value, local employment and incredible career opportunities in every single constituency across the UK, with a reduction in the rate of VAT across all pub sales,” Alton added.

Election pledge on rates

Property expert Colliers has called out the Conservative Government and asked if it will follow through on its election pledge of lowering the burden of business rates.

Business rates experts at Colliers have called on Chancellor Jeremy Hunt to “right the wrongs” of the 2023 Autumn Statement and cancel the business rates increases planned for April.

Colliers head of business rates John Webber said: “If the Chancellor does not take action to reduce this rates burden, we will see more retail chains going into administration.

“‘Retail, hospitality and leisure relief’ may have provided a temporary reprieve to the small shopkeeper or independent restaurant but gives no help to the big retail and leisure chains who are the anchor tenants in so many town centres and retail spaces and provide the opportunities for jobs.”

Webber is asking for a cancellation of the planned business rates increase in April, when Hunt increased the standard multiplier using the September rate of inflation figure of 6.7p, particularly as inflation now stands at 4%.

Although the Chancellor froze the small business rate multiplier and introduced the ‘Retail, hospitality and leisure relief’ for small companies, larger companies will still see their rates bills rise in line with the multiplier which will increase from 51.2p to 54.6p in the pound.

This will impact 220,000 businesses who will pay an extra burden of £1.66bn in tax from 1 April, 2024.

Colliers has estimated the retail, hospitality and leisure sector will pay more than £360m more in business rates.

Webber also wants to see a plan to reduce the multiplier and a renewal of relief schemes among his requests.

He said: “The Conservatives won the General Election in 2019 promising genuine reform of business rates and to ‘cut the burden of tax by reducing business rates’.

“So far, it has spectacularly failed its election pledge. Instead, we have a system that hinders businesses from expanding and deters prospective investors from overseas avoiding making new investment here in the UK because the business rates burden is so high.

“A tired Government and work-from-home ‘group-think’ civil servants have resulted in the burden of business rates continuing to climb – this Government is in the last chance saloon – let’s hope they do the right thing after all, even if it is 14 years too late.”