What does the Autumn Budget 2018 mean for hospitality?

Philip Hammond’s November 2018 Budget had some good news for the hospitality sector:

• the reduction in business rates for restaurants and others with a rateable value of less than £51,000 will reduce rates by a third;
• the lowering of the apprenticeship levy from 10% to 5% for small and medium sized enterprises should also assist restaurants and other enterprise hospitality businesses, many of whom are concerned about their ability to hire sufficient staff (particularly in the post Brexit climate);
• whilst the freezing of duty on beer, cider and spirits is a specifically targeted measure which will be a relief to all those working in the industry as well as their customers.

Nonetheless, if the economic growth forecasts set out in the Budget are correct, it suggests that the hospitality industry – like other UK based businesses – will find the landscape challenging for some years to come.

Against that background there will be increased pressure on the Chancellor in next year’s Budget to re-consider the old chestnut of whether it is fair that the hospitality sector should suffer the full force of the UK’s 20% VAT rate when a reduced rate of VAT is payable in many other countries (often below 10% – see, for example, Germany’s 7% rate and Portugal’s 6% rate for hotel accommodation).