The Government should introduce a permanent tax relief to encourage more investment by businesses, the British Beer and Pub Association (BBPA) has said. Responding to the Government’s consultation on capital allowances, which closes today (1 July), the BBPA supported calls by other leading trade bodies such as the Confederation of British Industry (CBI) to introduce a permanent 100% deduction for investment in capital allowance. The call follows data released this week revealing only 28% of hospitality businesses are currently considering any sort of investment due to the challenging economic climate. The tax relief would replace the current super deduction and introduce a system of ‘full expensing’ allowing businesses to immediately deduct qualifying investments from their taxes, rather than spreading the deduction over time. It is estimated such a system could also unlock the UK’s international investment potential, moving from bottom of the G7 ranking for business investment to fifth by 2026. In addition, the trade association noted that any adjustment to capital allowance tax should sit alongside a review to planning processes; with long application and approval processes currently acting as a major blocker to many pub companies investing in their estates. Commenting on the recommendation Chief Executive of the British Beer and Pub Association Emma McClarkin said: “We find ourselves in a position as a sector where we are keen to get back to business, provide the best service and experiences for our customers and thrive at the heart of communities across the country, but we are being held back by a lack of incentives to invest. “Our pubs and breweries need to feel confident to spend their money, especially after the past two years, and a permanent deduction would go some way to providing assurance and allow them to make investments to upgrade their venues, take on new properties and ultimately grow their businesses.”
New sector survey data reveals the crippling damage that rising energy, goods and labour costs is wreaking on hospitality venues. Profitability of hospitality businesses across the UK is plummeting with only 37% currently turning a profit, with the biggest factors being the rising costs of energy (74%), goods (55%) and labour (54%). The survey comes almost one year after the Government released its Hospitality Recovery Strategy, which looked to increase the resilience of the sector by improving profitability and putting pubs, bars, and restaurants at the heart of plans to revitalise local economies after the pandemic. However, the picture for hospitality businesses remains bleak, with almost half (45%) of businesses forced to reduced opening hours to avoid closing permanently and one in six reporting they have no cash reserves. Now hospitality leaders are calling on the Government to recognise the contribution hospitality businesses can make to the economy whilst noting that less than one-third (28%) are currently considering investing in their businesses because of the challenging economic climate. The group highlights three key priorities to get the sector back on track: tackling the current inflationary headwinds facing the sector; reforms that would unleash growth potential and a new tax and investment regime that facilitates a resilient and productive hospitality sector. In a joint statement the British Beer and Pub Association, British Institute of Innkeeping and UKHospitality said: “These figures are extremely worrying and demonstrate the critical situation hospitality businesses across the country are currently in. Given the chance, our industry has huge growth potential and the ability to play a critical role in the levelling up of communities in every single part of the UK, but instead we are still struggling to get back on our feet properly after a turbulent two years. “In the past few weeks inflation has hit record levels and costs on key ingredients and utilities has rocketed, whilst consumer confidence has plummeted resulting in fewer customers in our venues. We are weathering a perfect storm, but we can’t hold on forever, we need relief as soon as possible before the cost of doing business forces venues to close for good.”
A joint survey by the British Beer and Pub Association, UKHospitality and the British Institute of Innkeeping demonstrates how a shortage of workers is damaging hospitality businesses and the UK’s recovery Staff shortages in the hospitality industry are reaching critical levels, causing nearly half (45%) of operators to cut trading hours or capacity in order to cope, costing the industry £21bn in lost revenue and causing an estimated £5bn loss in tax for the Exchequer. The survey also shows that staff shortages are forcing one in three businesses in the sector to close one or more days a week. Recent ONS figures show sector currently has a record 174,000 jobs available and is experiencing 83% more vacancies compared to March-May 2019 (the most recent comparable period). The joint survey reveals that the highest shortages are for front of house roles, with 81% of those operators with vacancies looking to fill these roles. Chefs are the next most sought after, with 76% of operators with vacancies looking to recruit these positions, followed by kitchen porters (67%), and assistant managers (53%). In a joint statement, UKHospitality, the British Institute of Innkeeping, and the British Beer and Pub Association, said: “These figures clearly show the danger to the industry and financial loss to the country via taxes posed by the current staffing crisis. In short, the recovery of both the sector and the UK economy are being threatened by this workforce shortage. “Operators have been doing all they can to help solve the issue, from increasing wages, to flexible working. However, this can only help so much, and the sector must be given targeted support in order to solve the crisis. “People are at the heart of hospitality, providing the quality customer service and personal experiences that people want. On the other side of the coin, the sector offers jobseekers a wide range of roles and fulfilling careers with great potential for progression. The sector offers opportunities to people of all levels of expertise, experience and backgrounds. A booming hospitality workforce will create fantastic opportunities, drive economic growth and aid regeneration in communities across the UK.”
We champion issues that matter to the beer and pub industry. These are causes our members are passionate about; whether it’s promoting beer as the nation’s drink, or campaigning against increases to beer duty and businesses rates that are so damaging to community pubs.