- October 30, 2021
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Pubs and restaurant leaders have welcomed the Chancellor’s alcohol duty reductions and business rates cut but say more needs to be done to save the “fragile” sector.
In his Budget on Wednesday, Rishi Sunak announced a restructuring of alcohol duties, which will benefit breweries and craft producers in Britain, and confirmed a 50 per cent business rates discount.
He said: “I’m announcing today, for one year, a new 50 per cent business rates discount for businesses in the retail, hospitality, and leisure sectors. Pubs, music venues, cinemas, restaurants, hotels, theatres, gyms.”
Both have been broadly welcomed by the industry, but Mr Sunak did not mention VAT or inflationary costs that are hammering pubs, restaurants, and hotels.
UKHospitality CEO Kate Nicholls told i: “Look at tax increases and the wall of inflationary costs there is building. It [business rates cut] isn’t enough to offset that and many hotels, large venues and multi-site businesses are excluded.”
Ms Nicholls warned the cap of £110,000 on business rates relief means larger groups will not be helped.
“Positive as these announcements are, hospitality remains incredibly fragile, facing myriad critical issues,” a statement said.
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“Rising utility bills, wage bills and food and drink prices have resulted in 13 per cent inflationary costs that businesses are having to absorb at the same time as they navigate severe supply chain issues and chronic staff shortages. Given this toxic cocktail, it is imperative the Government go further to support businesses in our sector.”
Ms Nicholls again called on the Government to maintain the lower rate of 12.5 per cent VAT to help businesses recover from the pandemic.
Steven Alton, the CEO of the British Institute of Innkeepers, said: “Ongoing support will be needed both in the form of a fundamental reform of business rates to rebalance this unfair burden on our pub businesses with the online economy, and a long term reduced VAT rate to support our members’ recovery over the coming years.
“The most effective way to achieve this would be to maintain the current lower 12.5 per cent of VAT for the sector.”
Green King boss Nick Mackenzie added: “Today’s budget is a much needed vote of confidence in the great British pub as we face an uncertain winter, labour disruption and rising costs.
“We welcome the efforts to reduce the burden of business rates for our tenants and small operators, but the cap on the 50 per cent discount means there will be little benefit for medium and large pub owning businesses.
“The long-term health of the UK’s pubs still demands fundamental reform to lower the day-to-day cost of running a pub.”
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