April 1 sees a reversal of the reduced 12.5% Vat back to the standard rate of 20% which is no joke for those running hospitality businesses.
This reduction was introduced to help the hospitality industry weather the Covid storm and Rishi Sunak chose not to continue this support in Spring Statement last week.
As a consequence many in the hospitality are once again seriously concerned about their survival as this Vat increase comes at the same time as increases to NI contributions and energy tariffs that are putting serious pressure on household budgets and hence discretionary spend.
On top of these increases, we are all well aware of the impact inflation is having on all other cost centres including food and wages, which is why many in the industry are warning that price rises are inevitable – but will customers stomach these increases or stay home?
We think it inevitable that many households will already be looking to cut back on ‘treats’ such as the meal or drinks out, remembering how much cheaper it was meeting friends in gardens when the pubs & restaurants were closed, and we fear that with the weather improving this is likely to become more popular once again – albeit for a completely different reason.
If any of our contacts are involved with, or knows of anybody whose hospitality business is struggling, we would urge them to act decisively and seek independent professional advice and that is why we are always available for an initial zero cost assessment which can be arranged by contacting Alistair Dickson at SKSi.