The recent 2024 Autumn Budget has sent ripples of concern throughout the hospitality industry, as operators grapple with rising costs and diminishing support.
With the Chancellor’s focus on business rates and taxation, industry leaders have expressed their discontent, underscoring the need for more targeted support.
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Concerns over business rates and taxation
During the budget announcement, the Chancellor acknowledged the pressing issue of business rates, particularly for high street businesses. “Let me turn now to our high street businesses. I know that for them, a major source of concern is business rates,” she stated, unveiling plans for lower tax rates for retail, hospitality, and leisure properties from 2026-27.
However, she also noted, “But the previous government created a cliff-edge next year, as temporary relief ends,” announcing a temporary 40% relief on business rates for the sector in 2025-26, capped at £110,000 per business.
Despite these measures, many in the hospitality sector argue that such relief is insufficient.
Peter Kinsella, co-owner of the award-winning restaurants Lunya and Lunyalita in Liverpool, voiced his disappointment, stating, “As an employee-owned business, we are bitterly disappointed with the budget overall.”
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By GlobalDataHe pointed out that increased National Insurance contributions and the rise in the National Living Wage would have a devastating impact on their operations.
“We applaud the increase in the National Living Wage, it is much needed for everyone. But coupled with the increases in taxes on small businesses, the budget has the potential to be devastating on the sector, the high street, economic growth, and in particular the loss of jobs.”
Calls for targeted support
Kinsella’s sentiments were echoed by others in the industry, who feel that the government has failed to provide adequate support during these challenging times. He remarked, “The government should have backed up these changes with targeted support for our sector and small businesses in general.”
This sentiment was shared by Paul Askew, chef patron of The Art School restaurant, who lamented, “The new government has increased costs for hospitality in today’s budget. And they’ve given nothing whatsoever in terms of VAT recalibration or support.”
As businesses continue to recover from the effects of the COVID-19 pandemic, Askew highlighted the struggles many face, stating, “2025 is going to be another fraught year, with upwards of £3 billion in extra taxation to contend with on top of many other ongoing challenges that are not going away anytime soon.”
This perspective reflects a widespread sentiment in the hospitality sector that without immediate and targeted government support, many businesses may struggle to survive.
Small businesses feeling the pinch
The concerns extend beyond established restaurants to include small businesses that form the backbone of the hospitality industry.
Alice WainWright, co-founder of Rise Coffee Box, expressed her disappointment with the budget, stating, “Small business owners like me will be bitterly disappointed by Rachel Reeves’ Budget.”
She elaborated on the challenges she faces, noting, “The hike in Employer’s National Insurance will stop us from making essential hires, and cuts to Business Rate Relief will pause our plans for high-street expansion.”
WainWright’s experience is emblematic of a broader struggle within the sector, as many entrepreneurs feel the weight of increased financial burdens. “For a small business with big ambitions, our outlook has shifted from optimistic to uncertain,” she concluded, highlighting the anxiety prevalent among many operators.
As the hospitality industry navigates the aftermath of the Autumn Budget, it is clear that operators are seeking more than temporary relief; they are calling for comprehensive strategies that support sustainable growth and job creation.
The response to this budget reveals a sector in crisis, one that requires immediate attention and targeted interventions to ensure its long-term viability and success.
