Our Response to The Chancellor’s Autumn Statement

our response

Today the Chancellor of the Exchequer announced the Autumn Budget Statement. In this article we outline the key measures announced and also provide our response, breaking down how the measures announced could affect independent hospitality businesses.

Below is an outline of the measures announced that could directly affect members:

• Business rates relief for hospitality, retail and leisure (75% reduction) will be extended by 1 year
• Alcohol duty will be frozen until August 1st 2024
•The national living wage will be increased from £10.42 to to £11.44 from April next year
•The NLW age threshold will be reduced from 23 to 21

• Class 2 National Insurance for self-employed people earning more than £12,570 will be abolished
• Class 4 National Insurance – that is paid on profits between £12,570 and £50,270 – for the self-employed will be cut from 9 to 8%
• ‘Full expensing’ becomes permanent, meaning that companies can claim back 25p in corporation tax for every £1 invested in IT, machinery and equipment
• 12% National Insurance will be cut by 2% to 10%, meaning that for example someone on the average salary of £35k will save £450 a year from January 6th 2023
• Universal credit will be increased by 6.7% in April, which is an average increase of £475
• State Pension payments will be increased by 8.5% from April 2024

As an organisation that champions small independent hospitality businesses, we do not believe that today’s budget statement goes far enough. For many businesses the measures are too little too late and, in the majority, big businesses will be the main beneficiaries.

The extension of business rates relief to August 2024 was one of the support options listed in our #empowerindependents campaign, and whilst this is pleasing and positive news for many, we must highlight that it does little to support the vast majority of independent mobile caterers. These businesses, often operating without a fixed premises, fall outside the scope of traditional business rate relief schemes. Therefore, a significant segment of the hospitality industry remains excluded from much-needed financial support.

We must express our deep disappointment at the missed opportunity to lower VAT rates for the hospitality industry. Reducing VAT rates would have been a significant boost, helping businesses recover, sustain jobs, and contribute more effectively to the economy. The decision to maintain the current VAT rates is a setback for many hoping for a more substantial financial reprieve.

Furthermore, the increase in the National Living Wage that is a positive step towards fairer wages, poses a significant challenge for many businesses in our sector in the current climate. The hospitality industry, still reeling from the effects of the pandemic, now faces increased wage bills at a time when many are struggling to stay afloat. We are concerned about how this will impact our members’ ability to sustain their businesses and continue providing employment opportunities.

More needs to be done to assist the small independent businesses that make our high streets, towns and cities what they are today – every single one forms the heart of its own community, has families to support, employees to pay and ambitions to achieve. Today’s announcement, unfortunately, overlooks many of these businesses, leaving them excluded at a time of continued economic turbulence.

We urge the government to reconsider its stance on VAT rates for the hospitality sector and to provide additional support to help businesses adjust to the increased costs associated with the National Living Wage. We must work together to ensure the sustainability and growth of the hospitality industry, a key contributor to the UK’s economy and community life.

NCASS MD Nick Summers stated, “It is a huge disappointment and a missed opportunity to support and deliver growth in the independent hospitality sector. Ultimately independent hospitality businesses are suffering greatly because of the lack of short- and medium-term support. This continues to significantly impact community wellbeing, affecting both local businesses and the wider community.”

We will continue, together with our members, to campaign for support via the #empowerindependents campaign; raising the current challenges with MPs, writing to the Treasury and the Minister for hospitality, meeting with MPs and raising the profile of our sector in government.

Tell us what you think of today’s announcement by emailing us at: [email protected]

You can read the full government statement here.

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