UKHospitality and a coalition of hospitality businesses have written to Chancellor Philip Hammond to call for targeted support in this month’s Budget that will protect the economic contribution made by the sector.
The letter warns of the growing crisis in hospitality and on the high street, which has which has resulted in businesses failing, opening plans scrapped, operating margins eroded, thousands of jobs lost and investment put on hold.
It includes five specific Budget asks of Hammond, including: the introduction of an online revenue tax to freeze business rates increases and introduce enhanced hospitality rate relief over the next two years; to double the NIC threshold for employers to safeguard youth employment, training and take-home pay; and ensure that future NLW rates and structure are set independently by the Low Pay Commission, alongside evidence-based consultation with business.
The letter also calls for the re-introduction of hospitality capital allowances – and introduce a business rate moratorium after refurbishment – to incentivise regeneration and investment ahead of root and branch reform of rates; and to implement the Northern Ireland VAT review on tourism services and extend it to the whole country as well as freezing alcohol duties to promote exports, improve the balance of trade and create new jobs across the country.
UKHospitality chief executive Kate Nicholls said: “We want a grown-up partnership with Government based on an inclusive and integrated policy framework that champions the contributions this sector makes to the UK economy and society.
“We need a Budget which supports us in the vital role our business will play in delivering a strong economy, productivity and job growth as we go through the 4th industrial revolution and as we exit the EU.”
Signatories to the letter include: All Our Bars, Azzurri, Burger King, Casual Dining Group, Deltic Group, Greene King, Mitchell & Butlers, New World Trading Co, Novus Leisure, Oakman Inns, Pizza Express, Pizza Hut Restaurants, Revolution, Stonegate Pubs, The Pub People Company, Thorley Taverns, Wagamama, Whitbread, and YO! Sushi.
Ian Payne, chairman of Stonegate Pub Company, said: “According to BBC News, Amazon Services UK had a total tax bill in its last financial year of £4.6m, £2.9m of which was deferred, meaning they actually paid £1.9m. Compare that to the taxation of leisure and hospitality businesses in the UK.
“Look at the inequity of business rates alone: in the case of Stonegate, our rates bill alone of £33m is almost 20 times greater than the amount of tax which Amazon paid. And yet our turnover was around a third of Amazon’s, at £700m versus £2bn. It’s clear that we need government to provide a fairer and more progressive means of taxing business, and one more closely aligned to revenue generation.”
Keith Knowles, CEO of Beds & Bars, said: “This government needs to decide if it wants to create the environment for recession or an environment for stability and growth. At the moment it appears to be opting for the former.
“Hospitality businesses like pubs, restaurants, hotels and leisure attractions are saddled with excessive and increasing taxation and regulatory costs by a government that seemingly fails to understand the seriousness of the situation.