Hospitality industry reacts to 'disappointing' Autumn Statement

The Chancellor's announcement brought a mixed response from the major trade associations, who had been largely positive about the Government's re-election in May.​

Business rates​

The British Beer and Pub Association (BBPA)​ welcomed the extension of Small Business Rate Relief for another year, with the move set to be worth £25m to the industry.

However, the group criticised the Chancellors ‘very disappointing’ decision not to extend Retail Relief for another year.

“This is effectively a £1,500 tax increase for the majority of pubs, and will add £46m to rate bills,” said BBPA chief executive Brigid Simmonds.

“Retail relief was providing a discount for 75 per cent of all pubs. This is a particular problem in the run-up to the revaluation in 2017 as rates bills have become out of kilter with the value of individual businesses.”

The Association of Licensed Multiple Retailers (ALMR)​ argued that there was still need for ‘real and meaningful change’ to business rates.

“This is increasingly a system that sees business relying on multiple discounts and allowances and is a recipe for confusion or avoidance,” said ALMR chief executive Kate Nicholls.

She added that the licensed hospitality sector still carried ‘an enormous burden’ from additional taxes.

“[The situation] is plainly unfair and unsustainable for some businesses,” said Nicholls.

Apprenticeship Levy​

There was a mixed response to the news that the 2017 Apprenticeship Levy would see businesses with wage bills of over £3m taxed at 0.5 per cent.

The BBPA was grateful that the plans meant ‘small businesses like pubs will typically not be burdened’ but warned that the system needed to be ‘straightforward’.

However the ALMR warned that the added costs would harm businesses ‘already facing shrinking margins’.

“The ALMR’s Benchmarking Report shows that in labour intensive businesses such as pubs and bars, payroll costs often account for over half of all operating costs and almost one-third of turnover,” said Nicholls.

“This extra tax may well have the effect of distorting payroll costs even further and is likely to undermine in-work investment and training in staff.”

Police Budgets​

The ALMR said it was ‘pleased’ to see police budgets remain untouched.

“Any reduction in police budgets or numbers may have seen the licensed hospitality faced with the prospect of covering any security shortfall, with added responsibility for managing the UK’s night-time economy, without any real indication of how this was to be achieved,” said Nicholls.

Tourism funding​

Martin Couchman OBE, deputy chief executive of British Hospitality Association,​ welcomed the funding for cultural and tourism destinations.

“We were pleased to see the announcement of the new £40m Discover England Fund to boost tourism, and the government’s recognition in the Autumn Statement of the contribution of the industry to the UK economy," he said.

What next?​

The hospitality industry is set to continue campaigning for reforms ahead of the Budget next year.

“Britain’s pubs face a total tax bill of £7.3bn per year, so we will be keeping up the pressure for further measures, such as more action on both beer duty and business rates, as we move towards the Budget in March,” said Simmonds.

Nicholls added that the ALMR was hopeful next year’s Budget would bring ‘good news’ for the sector.

For a full round-up of what the Autumn Statement means for hospitality see here.​