Following the shockwaves caused by the UK Budget in October 2024, any hope of some respite in the 2025 Spring Statement has disappeared, according to the SLTA (Scottish Licensed Trade Association).
Colin Wilkinson, SLTA managing director, said: “The trade is still coming to terms with Chancellor Rachel Reeves’s ‘short-term pain, long-term gain’ Budget last autumn and braced for the triple whammy of an increase in the National Living Wage, increased employer National Insurance contributions and a 50% reduction in the threshold level for employer National Insurance contributions from April – nothing more than a tax on jobs.
“There is nothing for the hospitality industry in the Spring Statement and our fear is that many businesses will be forced to restrict investment and growth as well as face the risk of job losses as the changes from April make many operators question if they are in a position to maintain current staffing levels.
“Earlier this month, we marked five years since the UK hospitality sector closed because of the first Covid-19 lockdown – and many businesses have never recovered. Many of those that have managed to keep trading are struggling, have reduced their opening hours and staff numbers, and continue to muddle through amid a backdrop of rising costs across the board and the cost-of-living crisis which is causing consumers to rein in their spending.
“The darkest days of lockdown are now a distant memory for many – but not for the licensed hospitality sector which continues to suffer from a severe hangover of lost trade, fewer customers, staffing issues, squeezed profit margins, and shattered dreams.
“The commercial rating system is obviously devolved to each home nation and Scottish businesses desperately need a wholesale review of business rates. An urgent and complete review of the system in England, promised by the Westminster government, needs to be accelerated and would hopefully give momentum for the Scottish Government to do likewise. The Chancellor has already stated her intention to introduce two permanently lower tax rates for retail, hospitality and leisure south of the Border.
“Meanwhile, the SLTA continues to call for the introduction of a permanent non-domestic rates licensed hospitality-specific multiplier in Scotland of 35p to support our pubs and bars, encourage investment, help revitalise high streets, and rebalance the disproportionate business rates burden.
“We also urge the UK Government to look at the bigger picture by permanently reducing the VAT rate for licensed hospitality businesses to create a more level playing field with our European competitors and for an industry that makes a massive contribution to the economy – at UK, Scottish, and local levels.”