Hospitality sector ‘pleased’ with Autumn Statement announcements

By Melodie Michel contact

- Last updated on GMT

The hospitality sector welcomed the review of business rates and the abolition of National Insurance contributions for young apprentices
The hospitality sector welcomed the review of business rates and the abolition of National Insurance contributions for young apprentices

Related tags: Business rates, Taxation in the united kingdom

The hospitality industry generally welcomed Chancellor George Osborne’s announcements about business rates and the abolition of National Insurance contributions for young apprentices in the 2014 Autumn Statement, but expressed doubts about the abolition of Air Passenger Duty for children under 12 years of age.

The Chancellor announced​ the extension of business rate caps first introduced last year, and a 50 per cent increase in the rate discount for high street shops, pubs and cafes to £1,500. He also launched a full review of business rates, which hospitality organisations are looking forward to getting involved in.

Additionally, the government will scrap National Insurance contributions for employing young apprentices, which is undoubtedly a welcome step for the apprentice-heavy hospitality sector.

Osborne also declared the abolition of Air Passenger Duty (APD) for children under 12 next year, and under 16 the year after – a move that is seen as a ‘sidestep’ by the British Hospitality Association.

Autumn Statement 2014: Reactions from hospitality

British Hospitality Association chief executive Ufi Ibrahim

“One of the most important measures for the hospitality and tourism industry in the Autumn Statement was the abolition from April 2016 of employers’ National Insurance contributions for apprentices under 25. Along with the previous announcement of the abolition of the employers’ NICs for all under 21s from next year, this will further encourage the employment of young people by our industry.

“The move greatly supports the BHA's flagship Big Hospitality Conversation initiative which aims to inspire the next generation to seek careers in hospitality and tourism and which has already secured employer pledges of over 37,000 job opportunities for young people.

“Finally the cut and caps on the cost of business rates are welcome but we await the promised consultation on the future of this tax.

“The cut in APD is good news for the outbound tourism industry, in encouraging more families to vacation abroad. However, the real issue is the government help that’s urgently needed by struggling coastal and rural regions of our country. 

 “We had hoped to that the government would use the Coastal Communities Fund as part of a better co-ordinated move to regenerate rural and coastal communities with larger, more impactful and inspiring schemes.

“Reforms to stimulate domestic and inbound tourism within the UK are critical, especially given that our sub-national tourism structures are effectively broken. Hospitality SMEs are the backbone of this nation, and we would have preferred to see an announcement on urgent reforms helping to encourage new investment into raising the competitiveness of coastal and rural destinations.

“We are much more excited about the announcement of investment in roads, than we are in the announcement on APD. However, the investment in roads alone will not be enough to stimulate urgently needed economic growth through tourism in coastal and rural areas. The designation of specific areas as qualifying for investment and business rates relief and a fast track route for planning applications would make a big difference.”

Association of Licensed Multiple Retailers chief executive Kate Nicholls

“We are pleased to see the Chancellor recognising the enormous contribution that high street businesses make to the UK economy and taking steps to address the disproportionate burdens that those businesses face.

“The ALMR has repeatedly called for a root and branch reform of a business rates system that currently sees pubs and bars paying 15 pence per pint in rates compared to about 1 penny per pint in supermarkets. The UK’s high streets are more highly taxed than any other property market in Europe and this is clearly stifling investment.

“Currently, the calculation of rental values is not responsive enough to provide up-to-date information. We need a much more flexible system with annual reviews linked to CPI, providing a degree of flexibility to ensure that businesses are not paying rates based on valuations that are three or four years out of date.

“Measures to improve access to finances for small businesses are also welcome. The licensed hospitality sector employs 8 per cent of the UK’s workforce and venues generate around £235k gross value added (GVA) for their local economies. Increased investment in the sector, accompanied by a freeing-up of money from a welcome abolition of National Insurance contributions for young apprentices, will allow our businesses to continue investments of their own providing much-welcome jobs and growth throughout the country.”

British Beer and Pub Association chief executive Brigid Simmonds:​ 

“I am very pleased to see that small business rate relief has been extended for a further year today. The increase in the retail relief to £1,500 is more good news, that will benefit 64 per cent of pubs. Overall, over 70 per cent of pubs will receive retail relief.

“For pubs, the current business rates regime makes up ten per cent of costs. As well as getting bills down, we need to make it easier for pubs to appeal their rates bills and make the system more responsive to changing business conditions. The government is certainly giving increasing attention to this important issue for pubs. 

“I also welcome the removal of National Insurance payments for apprenticeships for those under 25. The pub industry can create many jobs and careers for young people quickly, with around 45 per cent of the country’s 600,000 pub employees under 25. Making it easier to create more apprenticeships is good news.”

Campaign for Real Ale AMRA head of communications Tom Stainer:

“With 31 pub closing every week, the Chancellor’s extension of small business rate relief and an additional £500 business rates reduction for most pubs in England is great news for pub goers. Business rates are a significant burden on pubs and so these announcements will help keep pubs open, boost investment and ensure consumers continue to benefit from great pubs.

“The review of business rates also provides an opportunity to address the disproportionate tax burden on pub beer sales compared to supermarket beer sales.”

Forum of Private Business chief executive Phil Orford MBE:

“The Chancellor was keen to provide a much needed boost for Britain’s small businesses and there were some positive measures in today’s speech which will go a long way to helping reduce costs and improving business confidence. Whether this will be enough as we enter a period of uncertainty at the start of next year remains to be seen.

“It is good to see that the Chancellor has agreed with our suggestions of short-term measures to reduce the pain of excessive property taxation. While we also welcome the Chancellor’s decision to answer our repeated calls for a proper review of the system and the way in which it is calculated, the devil will definitely be in the detail.

“With the review scheduled for after the general election, we are keen to see all parties commit to making concrete moves to tackle an issue that many businesses feel has needed addressing for some time.

“Announcements of additional British Business Bank and the extension of the Funding for Lending scheme are also welcome measures to address ongoing small business confidence issues around the ability to obtain the finance they need to grow.”

Cut Tourism VAT campaign chairman Graham Wason:

"The CTV campaign applauds the announcement of a further cut in APD and is delighted that this Government is beginning to address barriers to the competitiveness of UK tourism. We hope that cutting tourism VAT will be next. Independent research shows that cutting tourism VAT gives a significantly greater boost to British exports as it encourages UK residents to take more days out, short breaks and holidays in the UK, at the same time increasing overseas visitors to the UK."

Related news

Show more

Spotlight

Follow us

Hospitality Guides

View more

Featured Suppliers

All suppliers