Chancellor’s ‘disappointing but predictable’ decision not to reduce VAT does nothing to help struggling hospitality businesses, warns SLTA
The SLTA (Scottish Licensed Trade Association) has reiterated its concerns of the material threat of long-term damage to the competitiveness of Scotland’s licensed hospitality and tourism sector as a result of ongoing inaction by both the UK and Scottish governments.
Commenting on Jeremy Hunt’s Spring Statement, Colin Wilkinson, SLTA managing director, said that the Chancellor’s failure to implement a reduction in VAT in his Budget was “extremely disappointing but predictable” and warned: “It’s a torrid time for licensed trade operators across Scotland just now – everyone is struggling with ongoing cost of living issues.
“There was no response to pleas from SLTA and other industry groups for a VAT reduction for the hospitality sector in the Chancellor’s Autumn Statement last November, so today’s news is extremely disappointing but predictable. Doing so in his Spring Statement would have brought some welcome relief to businesses across the hospitality and licensed trade spectrum which are struggling with huge utility bills and other costs.
“Obviously we welcome Mr Hunt’s decision to increase the VAT threshold from £85,000 to £90,000 from April 1 which might help some businesses in Scotland but without a reduction in VAT it is inevitable that many hospitality businesses will continue to struggle.”
Mr Wilkinson, commenting on the Chancellor’s announcement that Scotland is to receive £300 million in Barnett consequentials, said: “Our hope now is that Finance Secretary Shona Robison will channel some of this funding into delivering some form of discount in non-domestic rates for 2024/25, mirroring the situation south of the Border.”
He added that the SLTA welcomed the decision to freeze alcohol duty until February 2025 and also freeze fuel duty for a further 12 months, the latter taking some pressure off suppliers to the licensed hospitality trade.”
In addition, Mr Wilkinson said: “A 2p cut in National Insurance contribution is obviously good news for consumers and this might put more money back into people’s pockets which they will hopefully spend in hospitality outlets.”