NTIA calls for VAT reduction, UKDSA slams figures on spiking

By Gary Lloyd contact

- Last updated on GMT

Relief for businesses needed: Michael Kill and Sacha Lord
Relief for businesses needed: Michael Kill and Sacha Lord

Related tags: Legislation, Social responsibility, Multi-site pub operators, Pubco + head office, Health and safety

The Night Time Industries Association (NTIA) has called on the Government to reduce VAT to 12.5% as the sector faces a “bleak summer”.

Among the trade body’s calls, it wants a reduced rate of 12.5% VAT for the hospitality, late-night economy and events sector for the next 12 months; a commitment to continue business rates relief beyond the 2022-23 financial year; and an energy cap for small to medium enterprise businesses.

It said although there is a temptation to think that, because restrictions have now been removed, the sector will simply snap back to its pre-pandemic strength, but it remains in in a very fragile state.

Research carried out by the NTIA of more than 200 businesses within the late-night economy showed 53.2% of respondents have seen a 30% increase in operating costs compared to pre pandemic levels with 48% of respondents ‘barely breaking even’ when asked if their business is still profitable based on the increase of trade cost while 20.2% stated they are losing money.

Some 44.7% of respondents are ‘unsure’ if their business will survive the next 12 months with 20.8% stating they are ‘not confident’.

Those that have renewed both gas and electricity contracts in the past four month have seen a 37% increase in energy costs. Some renewals of electric contracts are costing up to 54% more and new gas deals claiming up to 151% more.

Future uncertainty

NTIA chief executive Michael Kill said: “Time is running out for the Government and the chancellor to put measures in place to stem the spiralling costs of living, with inflation reaching 9.1%. 

“Hospitality, night-time economy and events industries are facing a bleak summer and uncertainty to what the future holds with no clear strategy presented by the Prime Minister on when or how this crisis will be averted.

“Businesses are struggling to meet operating costs, in many cases barely breaking even, with staff and customers starting to feel the impact of cost of living. 

“We need decisive action from the Government, with the industry calling for an immediate reduction in VAT to 12.5% across the board with an extension of business rates relief and an energy cap for small medium enterprise businesses.”

Sacha Lord, night time economy adviser for Greater Manchester and NTIA chair, added: “The combined, unrelenting pressures of rising supply costs, energy increases and historic pandemic debt burdens are taking their toll on operators across the hospitality and events sector.

“Having barely recovered from the upheaval of the past two years, they find themselves once again in an uphill battle which, to many, will be simply unsustainable.”

Misleading figures in spiking report

Meanwhile, the UK Door Security Association (UKDSA) and NTIA have welcomed the release of the Home Affairs committee’s report on drink spiking in the on-trade while the former criticised “misleading security resource figures”.

A spokesperson for UKDSA said: “We welcome the Home Affairs committee’s report on spiking, and within it the recognition that we have some challenges with regard to security resources, particularly the number of women within the security sector.

“It is somewhat frustrating to once again see the same data we have seen for the past 12 months, which identifies the number of door security licences in circulation. 

“What it does not highlight is the number of inactive licences, or even the licences of people who are no longer in the country.

“With the licensed system set up as it stands, many licence applicants apply for door security licenses to work within the static guarding sector and never set foot on a door or within licensed premises as a member of security, further skewing the figures highlighted within these reported figures.”

The UKDSA added there needs to be a fundamental review of the Private Security Act and the role of the regulator to get closer to a resolution of the issues within the report.

Related topics: Legislation

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