“This Government is guilty of neglecting thousands of businesses and millions of employees and freelancers”

Britain’s Chancellor Jeremy Hunt has extended business rates relief but failed to introduce a cut in hospitality VAT following numerous pleas from within the within the industry.

The plans outlined today will mean that business rates relief for those in the hospitality, retail and leisure sectors will continue for another year and rise from 50% to 75% for 2023-24, up to £110,000 per business.

On top of that, the business rates multiplier is being frozen for another year and a £1.6b transitional relief scheme will be introduced to cap bill increases for the smallest properties to 5%.

Despite the government’s new measures, hospitality VAT is to remain at 20%, despite an ongoing campaign calling for it to be lowered, and there was no mention of the planned rise in alcohol duty.

Replying to UKHospitality's Kate Nicholls on Twitter, Tony Rodd, Chef Patron of Copper & Ink, said: “It's an atrocious budget for the industry! Business rates offer minimal relief when living wage is c£1,600 increase per head, VAT remains at 20%, energy bills are soaring (ours have increased by £4,600 a month!) with no news until end of year, plus reduced spending from guests.”

It's an atrocious budget for the industry! Business rates offer minimal relief when living wage is c£1,600 increase per head, VAT remains at 20%, energy bills are soaring (ours have increased by £4,600 a month!) with no news until end of year, plus reduced spending from guests

— Tony Rodd (@TonyRoddUK) November 17, 2022

Regarding pay, Hunt announced that the National Living Wage for over-23s will increase from £9.50 an hour to £10.42 an hour from April 2023, resulting in an estimated pay rise of over £1,600 for a full-time worker.

There was also no confirmation on the future of energy bill support for businesses, but the government is due to publish a review by the end of the year.

Commenting on the budget, The Night Time Associations issued a statement arguing that: “This Government is guilty of neglecting thousands of businesses and millions of employees and freelancers across the night-time economy, this budget has not gone far enough and still lacks clarity and will, without doubt, see a huge swathe of SMEs and independent businesses disappear in the coming months.”

...and will, without doubt, see a huge swathe of #SMEs and independent businesses disappear in the coming months.”

“When businesses should be preparing for the busiest period of the year, they are now having to consider their future, and will remember the fourth failed attempt..

— Night Time Industries Association (@wearethentia) November 17, 2022

Help with energy costs has been extended for consumer households, but at a less generous level.

It means the bill for a typical household will rise to £3,000 in April, up from £2,500 now.

Consumers are also set to have their incomes squeezed and the point at which the highest earners start paying the top rate of income tax will be lowered from £150,000 to £125,140.

The income tax personal allowance threshold will be frozen until 2028, meaning millions of people will end up paying more in tax. Employers' National Insurance contributions will also be frozen until April 2028.

Craig Bunting, owner of Derby-based coffee shop, Bear explained: “I'm currently sat in one of our warm coffee houses in the beautiful market town of Stone, Staffordshire, having invested thousands on a bricks and mortar store, yet hospitality remains one of the most highly taxed sectors in the UK. That does not support growth.”

He added: “The only thing growing is the misalignment between the central Government and the strong hospitality sector in the UK. The devil's in the detail regarding the business rates reform and its impact. Also, much-needed VAT support for the sector been completely ignored. The Government recognise there will be "troubled times ahead", but it seems they take their morning coffee for granted at a time many others don't.”