Proactive Investors - Hospitality bosses have called Jeremy Hunt’s statement “an empty budget” after he failed to reduce VAT or business rates.
Martin Williams, boss of Gaucho owner Rare Restaurants branded the Chancellor’s announcement “an empty Budget in terms of both ideas and support for the hospitality sector.”
Earlier this week, Gaucho revealed it would be serving VAT-free lunches every Friday in March.
With restaurants, pubs and bars having faced weaker demand, higher costs and a shrinking workforce, industry bodies like UKHospitality had been campaigning for VAT to drop to 12.5%.
Kate Nichols, UKHospitality’s chief executive said: “A lower rate of VAT would have been a bold reform that would drive economic growth, keep prices down and unlock investment in the sector.
“It would have been good for businesses, the public and the economy.”
Williams echoed Nichols’ sentiment in his own comments, arguing that the update offered “no meaningful support” for an industry that employs more than 3 million.
Loungers (LON:LGRS) boss Alex Reilley said on X: “This current government has to be the most anti-business Tory administration in history.”
Business rates are also set to increase, with hospitality businesses predicted to experience a tax hike of £1.66 billion when the new financial year filters through.
Alex Probyn at Altus Group (TSX:AIF) said: “The 6.7% increase, at an effective tax rate of 54.6% will mean that in April firms will face the biggest year-on-year increase to the standard multiplier since 1991.
“This is no way to encourage investment and foster economic growth, especially after two consecutive quarters of contracting GDP.”
Nichols added: “Increases to business rates and jobs taxes in April will only increase bills further and contribute to inflation, as venues will be forced to pass these costs onto consumers.”