Chris Maloney, Business Advisory Partner and Head of the Hospitality & Leisure team at Menzies LLP
At a time when hospitality sector business insolvencies are rising at a rate of 66% year on year, there were high expectations for today’s Autumn Statement. However, while there were some positive signs, the overall impression was that much more could have been announced to support our sector and that it failed to address some key concerns.
Rates and duties
It is great news to hear that the Hospitality and Leisure Business Rates Relief scheme will be extended for a further year at 75%, saving the average independent venue over £12,800 next year. At a cost of £4.3 billion, this is a significant tax cut which recognises the role of hospitality and leisure venues in our communities.
While the small business rate multiplier will be frozen, the Chancellor chose to increase the standard multiplier – this will have a significant impact on businesses that are already suffering.
An additional bonus for the sector is the freeze in Alcohol duties until 1 August 2024.
Staffing and Recruitment
Brexit and Covid, in particular, have hit recruitment hard in an industry already beleaguered by staffing difficulties due to historically low pay and unsociable hours resulting in people looking at other employment options. However, with the planned changes to the benefits regime and a focus on upskilling, our hope is that it will result in an increased flow of people into the sector.
Furthermore, despite the increase in the National Living Wage being great news for employees in the hospitality and leisure sector, this will however be an additional cost that will need to be borne by the employer. This will either hit their bottom line, or indeed be passed onto the customer.
Similarly, despite the good news for employees in the reduction of Employee National insurance, it was a great shame there was no reduction to Employers’ National Insurance contributions.