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Budget Reflections

It didn’t take a horrendous budget for all within hospitality to be talking about the difficulties they face; the challenges have been a stark reality for years.

But the new government’s budget at the end of October brought another round of additional pressures on the hospitality industry, affecting businesses through increased costs and limited relief measures.

One of the significant changes is the anticipated rise in the National Living Wage to £12.21 per hour, an increase that aims to support workers but adds to operating costs for businesses already challenged by rising costs that are up nearly 50% since 2021. The increase on employers’ national insurance contributions, is another cost to find off that money tree at the bottom of the garden.

Probably the most critical concern for hospitality are business rates. The temporary relief introduced during the pandemic is set to end, leading to sharp increases in property tax rates for many small businesses. Without an extension of this relief, companies could face a sudden and substantial increase in operating costs, limiting their ability to plan for the future and invest in growth initiatives.

The only positive move came from the Government’s “commitment to support smaller brewers” in the form of a 1.75% reduction in beer/cider duty for draught products, which will result in 1p off per pint of average strength beer and cider.

The feeling in the industry is that the budget was far from pro-business’ and perhaps one that many small business operators and, in particular, pub and bar operators will regard as one of the worst in living memory.

With an estimated only one in four pubs being profitable as it is​, adding yet more costs into the mix is hardly going to improve the industry that is meant to be there to keep us all connected and happy.

Gill Sherratt - Head of Licensing

Gill Sherratt | Head of Licensing

Gill Sherratt is head of licensing at Napthens Solicitors and manages the AfterHours service, based in the firm's Blackburn office.