Following the unveiling of the Autumn Statement, Michael Kill, Chief Executive Officer of the Night Time Industries Association (NTIA), has expressed concern regarding the government’s fiscal decisions.
They are calling for the Government to be transparent in its long term economic strategy, with clear thresholds for relief, as seen during the pandemic, in line with the Prime Ministers “Cut Taxes over Time” Statement.
At a time when hospitality sector business insolvencies are rising at a rate of 66% year on year, the statement has missed a crucial opportunity to support businesses, particularly small and medium enterprises, by implementing the substantial tax reductions required to ensure businesses can recover from the pandemic and cost of doing business crisis. These reductions could have offered essential financial breathing space, catalysing growth and stimulating investment.
Mr. Kill has noted that while the extension of the 75% business rates discount for smaller retail and hospitality businesses in England is welcome, for many this support will be wholly swallowed up by the announced increase in the national living wage, stating that these decisions would do little to stave off a critical tipping point for thousands of businesses across the industry this winter.
Notably absent from the Autumn Statement, Mr. Kill pointed out the lack of a reduction in VAT. He argued that such a reduction would align the UK with several European counterparts, potentially fostering investment, growth, and overall business confidence.
Michael Kill remarked, “The Prime Minister and Chancellor’s rhetoric of cautiously cutting taxes over time is at odds with the reality of the challenges faced with our current record high tax burden, particularly within the hospitality, night-time economy, and creative sectors. This burden is starkly evident when compared to other European countries.”
The NTIA contends that the budget lacks necessary support for industries grappling with the prolonged impact of the cost of living crisis. The imposition of highly inflationary increases in the national living wage exacerbates the challenges faced by businesses within the sector.
Mr. Kill acknowledged the Alcohol Duty Freeze but noted that a one-off election-year freeze does not help a sector that is now taxed at unsustainably high levels. The ‘Full Expensing’ Capital Allowance relief, while welcome, also benefits only a small minority of the largest businesses. Mr Kill noted that these measures do little to support the majority of independent businesses, which represent over 60% of the sector and are struggling to survive, let alone grow or invest.
“The absence of VAT measures in the Autumn Statement is a missed opportunity to spur investment and growth in the hospitality, night-time economy and creative sectors. A VAT reduction, along with thoughtful considerations for rising labour costs, would deliver much-needed relief and send a positive signal to businesses, elevating confidence and fostering an environment conducive to long-term planning,” emphasised Michael Kill.
He concluded, “This budget is a stark reminder of the unwillingness to acknowledge the short-term economic challenges and emphasises the lack of operational business knowledge shared by budgetary and policy decision-makers, especially at a time when the industry is in desperate need.”
Mr. Kill addressed the Prime Minister directly, requesting clarification on the long-term strategy regarding tax cuts, especially the thresholds for additional relief, similar to the measures taken during the pandemic. He emphasised the importance of transparency to enable businesses to make well-informed decisions about the future.
The Night Time Industries Association urges the government to reconsider its fiscal policies, calling for a comprehensive understanding of the unique challenges faced by businesses in the night-time economy.
The NTIA emphasises the importance of collaborative efforts between industry stakeholders and policymakers to develop solutions that foster growth, protect jobs, and contribute positively to the economy.