The Chancellor’s 2016 Spring Budget on the 16th March held a number of important revelations that will impact bars, restaurants, pubs and others in the leisure and hospitality sector in 2016 going forward.
Working with restaurateurs and others professionals in the sector it’s vital that our consultants stay on top of hospitality industry news and are able to report on all of the latest industry trends, giving our clients industry-leading advice.
Here is what the Chancellor’s budget means for the rest of 2016.
Small business rate relief: Hospitality industry responds
Small businesses received good news at the Budget with news from George Osborne explaining that rate relief for small enterprises would be extended. He ensured this would provide “rocket boosters on the backs of enterprise and productive investment”.
While small business owners have expressed their pleasure at this news, those who work jobs in hospitality industry organisations had a less optimistic outlook, asking why rate relief wasn’t extended to their businesses.
Rob Payne, CEO of Best Western Great Britain said “We were looking to the Budget to provide relief from the price pressures we are facing such as National Living Wage but it was not forthcoming.”
Earlier in his statement, he expressed “disappointment” in the Chancellor, suggesting medium to large sized businesses appear to have been forgotten.
Surprising stamp duty cut
Those working in the pubs, restaurants and in the wider leisure sector will be pleased of the Chancellor’s new cut in commercial property stamp duty.
David Rawlinson, Director of Restaurant Property said “This news will benefit our clients. One of the concerns all clients have when searching for their next property is whether they will be able to afford the associated costs – stamp duty being one of them.”
Mr Osborne has cut stamp duty on commercial properties, over doubling the threshold from £6,000 to £15,000. This means that overall, 9% of businesses will see an increase in stamp duty, while 90% will see a decrease.
According to Kate Nicholls, Chief Executive the Association of Licensed Multiple Retailers (ALMR), “The Chancellor has made some positive moves towards supporting businesses, and we welcome measures to reduce business rates burdens, but there is a risk that costs will continue to rise for employers.”
Growth forecast 2016
While there are some concerns by those groups connected to medium and large organisations that operate within the hospitality sector, looking at recent growth trends, the industry is set to expand in 2016.
According to the Government’s own figures, in 2014, the UK hospitality industry is estimated to have directly employed 2.9 million people. That is up by more than 331,000 from 2010. This trajectory is set to continue positively.
That said, growth could come more slowly in 2016 compared to previous years with issues like the EU referendum on 23rd June expected to take its toll on the restaurant and hospitality sector. In addition, the proposed sugar tax might have implications for the pub and restaurant sector if the Government doesn’t take the necessary steps to prevent producers passing the cost to retailers.
2016 in a nutshell
Overall, we predict 2016 to be another year of growth for the restaurant and hospitality industry, with the Chancellor’s Budget protecting the interests of small businesses (in particular) against potential negative factors.
Medium to large-sized businesses will have to do more to weather the storm, but with the economy growing and the public’s demand for hospitality and leisure destinations growing, we expect growth to remain.
If you’d like to speak with a member of our highly-qualified team, call us on 020 7935 2222, or contact us today on our website.< Back