UKHospitality lays out budget proposals

The upcoming budget could be one of the most crucial in recent years for the hospitality industry. While that sentence has been uttered countless times over the past decade, hospitality operators will have a small amount of hope in the build-up to 28^th October, as the sector tunes in to discover what Andy Burnham's government is going to do for the industry.

UKHospitality has said next month's budget is a "moment for change", where the new government should move away from disproportionately taxing employment. In its first official statement in relation to the imminent budget, the trade body says the chancellor John Healey should rebalance the tax system to bring hospitality costs down, which will give businesses much-needed financial headroom, drive job creation and support high streets.

What is UKHospitality asking for?
UKHospitality has proposed four key measures to bring costs down and back hospitality growth:

• Cut VAT to 10% for hospitality, bringing the UK in line with Europe
• Fix business rates for hospitality by increasing the multiplier discount towards 20p; removing hospitality businesses from the surcharge on properties with a rateable value above £500,000; and providing a 20% discount for hotels and other businesses hardest hit by the 2026 revaluation, in line with the pub sector support.
• Reduce employer NICs for hospitality by progressively increasing the threshold to £10,000 by the end of the parliament.
• Replace the holiday tax with a tourism bonus, where local authorities are devolved VAT funds generated by tourism, instead of imposing an additional tax on families and businesses.

"Hospitality has always been a sector proud of its ability to offer anyone an opportunity – young people, school leavers, non-graduates and many more," said Allen Simpson, chief executive of UKHospitality. "It is one of the few sectors which creates job in every postcode.

"Government decisions in recent years have put that all at risk as hospitality’s tax burden has grown disproportionately to other sectors. Hospitality was a growth engine that has been pushed back into the pack. Costs up, opportunities curtailed, jobs lost and businesses closing their doors for good.

"This budget, under a new prime minister, is a moment for change. We have already seen promising signs from the new government in its approach to hospitality and I hope that this budget will see further backing for the entire hospitality sector. Cut VAT, fix business rates, reduce employer NICs and replace the holiday tax. These are four clear solutions that can bring costs down and drive hospitality growth."

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