Operators speaking to The MA said reducing the tax burden on the sector would give businesses greater confidence to invest, recruit and grow.
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VAT reduction
Chestnut Group managing director Philip Turner said a VAT reduction would have the quickest impact across hospitality, although he remained doubtful it would be delivered.
“The thing that would impact the entire sector really quickly would be a VAT change, but my confidence as to whether that is going to happen is not huge. The impact of the national insurance changes was enormous and reversing that would make a huge difference, not just to our business but to many businesses.”
What people in my position are looking for is confidence in a Government that wants to see businesses succeed and generate additional tax revenue through growth, rather than through taxing existing revenue.
Philip Turner
“Once we have a roadmap from Government showing that commitment to supporting business, that gives people the confidence to invest and grow.”
Admiral Taverns chief executive Chris Jowsey placed business rates reform at the top of his list, followed by lower draught beer duty and VAT.
He said: “My first priority would be lower business rates and, ideally, fundamental reform. We probably will not get that in this Budget, but the Government has to deliver that reform before 2029.
“Second would be lower draught beer duty. Widening the differential between draught and non-draught products to 30% would be really helpful. VAT would be my third ask, although I am not particularly hopeful on that one.”
Jowsey also called for a more streamlined planning system to encourage investment.
He added: “If nearly 40% of revenue goes in tax of one kind or another, it becomes difficult to justify investment in marginal pubs.
If the Government took less at that point, we could invest more, pubs would generate more, employment would increase and ultimately more tax would come back to the Government.
Chris Jowsey
‘Meaningful difference’
The Three Hills Bartlow managing director Emma Harrison said her priority was cutting hospitality VAT to 10%.
She said: “This would make an immediate and meaningful difference to the viability of pubs and restaurants, which are operating on increasingly tight margins.
We also need a fairer assessment of business rates for pubs and an end to the relentless increase in the cost of employing people, particularly young people, through rising minimum wages, employer national insurance and other employment costs.
Emma Harrison
Harrison said the Three Hills had seen its rateable value rise by 55%, from £42,800 to £66,500.
She added: “We cannot keep absorbing these increases indefinitely and we cannot simply pass them all on to customers. Without meaningful action, businesses will be forced to raise prices, cut investment, reduce staffing or, ultimately, close.”
Killingworth Castle operator Claire Alexander also called for reductions in business rates and VAT.
She said recent reductions in rates liabilities had made little difference against much larger increases in rateable values and warned the current system risked penalising successful pubs.
Alexander also backed calls from the #VATSTheProblem campaign for a lower hospitality VAT rate, arguing lower rates elsewhere had helped encourage consumers to eat and drink out more frequently.
‘Point of no return’
Multiple operator Tim Skinner said the cumulative impact of employment costs, taxation and operating expenses had created a structural problem for hospitality.
He called for VAT to be reduced to 10%, meaningful business rates reductions and a reversal of the increase in employer national insurance.
You cannot keep taxing growth and expect businesses to survive. We are approaching a point of no return. Thousands of businesses are being kept afloat by owners exhausting their own resources.
Tim Skinner
“The Government has an opportunity to restore confidence and protect thousands of businesses and jobs. Failure to act will have consequences far beyond hospitality, including lost jobs, empty high streets, weakened communities and ultimately less tax revenue.”
Tamil Crown and Tamil Prince owner Glen Leeson said a VAT reduction would make a “massive difference” to operators working on increasingly fine margins.
He said: “What is important to understand is that a busy restaurant is not always a profitable restaurant. That is the misconception. Ultimately it is a game of margins and they are fine margins at best, even for an experienced operator who scrutinises costs closely.
“A VAT reduction would be great and some form of rates relief would also go a long way. I would be crossing my fingers for VAT and national insurance cuts. Essentially, we need costs to come down.”
