Expert Insight
NEWS from
Kate Nicholls UKHospitality Chief Executive
After a relentlessly negative year, the outlook is beginning to appear more positive. Although the
reopening dates for hospitality are still some time away, there is a sense that we are moving in the right direction. All eyes were on the Chancellor this month and it was crucial that he delivered a bold package of support to see us through the final weeks and months of the crisis, and set us up for the years of recovery to come. Thankfully, the Treasury listened to us and delivered a range of measures that could prove invaluable.
Securing an extension to the VAT cut and the business rates holiday was absolutely crucial, so it was good to see the Chancellor deliver on a big UKHospitality campaign ask. The VAT cut may fall short of what we had asked for, but it presents us with an opportunity to score a long-term victory for the sector. Introducing an interim rate of VAT, initially on a temporary basis, could give us the ammunition we need to convince the Government to make it permanent. It might, strangely, be a positive legacy of an almost-wholly negative year of crisis. It would go a long way to addressing the tax imbalance that hospitality faces.
After years of battling, we finally appear to be making real headway on the perennial issue of business rates. Anyone who has worked in hospitality understands that our sector is unfairly penalised by an antiquated system that continues
to focus, counterproductively, on property-heavy businesses. Relieving the rates burden during this period of recovery will provide valuable breathing room for businesses as they reopen. It will take time for some businesses to get back to full trading and many will have already spent most, if not all, of their cash reserves. Lessening the rates burden at this time is a vital pillar of support from the Treasury. We recognise that – at time of writing – larger businesses are excluded due to the cap, but there is still reason to be optimistic. Don’t forget that the Government is currently undertaking a wholesale review of the system – something we have been advocating for years. We should be able to present evidence that this rates cut has been pivotal in boosting businesses. The visibility of the impact of COVID on the hospitality sector should highlight to MPs the real
need for an updated tax regime that no longer hits us hardest.
The increase in the recruitment bonus should provide a substantial boost to employers looking to rebuild, along with the doubling of the apprenticeship incentive. Remember, we want and expect our sector to be at the sharp end of the economic recovery. Just as we did following the 2008 crash, hospitality can drive investment, provide much-needed jobs and revitalise communities that have been hit the hardest by this. Incentives and support to hire will be a major asset.
The rebuilding process is not going to be a quick or easy one, but the job should have been made more manageable by securing this support. Let’s hope we can build upon it, return the faith shown in us and help lead the country, both economically and socially, towards happier times.
6
March 2021
www.venue-insight.com
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