As we approach the Spring Budget on 6 March 2024, the UK Hospitality and Leisure sector faces ongoing challenges. Despite some positive outcomes from the Autumn Statement, such as the freeze on the small business rates multiplier for 2024/25 and an extension of the business rates relief scheme, businesses in this sector continue to grapple with ongoing pressure.
Business Rates
While the extension of the business rates relief scheme is helpful, the 6.7% increase in the standard multiplier from April 2024 adds strain. UK Hospitality advocates for a 3% cap on business rates increases which would support cash flow and encourage investment.
Tax Cuts
The sector relies on disposable income and consumer confidence. A basic rate income tax cut could stimulate additional spending on recreational activities, benefiting the industry. Similarly, a reduction in the VAT rate for Hospitality and Leisure businesses, along with an increase to the VAT threshold, would ease the tax burden and boost customer spending.
Staffing
Resourcing challenges and the recent increase to the National Living Wage has put additional pressure on H&L businesses. A reduction to National Insurance could help ease this burden, as well as an increase in support for apprenticeships and training programs to enhance the attractiveness of careers in the sector.
Summary
In summary, rising costs and taxes have left businesses struggling to cover operational expenses, let alone invest in growth. H&L venues play a vital role in local communities and contribute to both their economic and social fabric. Support is crucial for their revival and continued success and the Spring Budget presents an opportunity to address the sector’s challenges, promote growth and support the longevity of businesses that form the heart of our communities.
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