The chancellors budget for 2024 has officially been announced, so here’s some of the key points that may shape the course of the hospitably industry over the next 12 months.

 

• 1. Extended VAT Relief: A Financial Respite 

One of the standout features is the continuation of reduced VAT rates for the hospitality sector. The amount small businesses can earn before they must register to pay VAT will rise from £85,000 to £90,000 from April, the first time the rate has increased in the past seven years. This extension provides a financial respite, a welcomed support for some businesses still treading the path of recovery post-pandemic.

 

• 2. Alcohol Duty Freeze: A Toast to Stability 

The freeze on alcohol duties stands out as a significant move, offering stability to estimated 38,000 pubs, bars, and breweries until February 2025. This measure not only maintains a level playing field for these establishments but also ensures that patrons can continue to enjoy their preferred tipples without an additional financial burden.

 

• 3. Investment in Skills and Training: Nurturing Talent 

Recognising the critical role of skilled personnel in the industry, the budget allocates funds for skills and training initiatives. This investment aims to nurture talent within the hospitality sector, ensuring a workforce that is equipped to deliver exceptional experiences.

 

• 4.National Insurance: Keeping More in Pockets 

National Insurance will be cut by two percentage points from 6 April, meaning the tax will drop from 10% to 8% for employees and from 8% to 6% for the self-employed. Meaning the average employee will end up with an extra £450 in their pocket over a year.

 

• 5. Green Initiatives: A Sustainable Shift 

Sustainability takes centre stage with the introduction of green initiatives. From responsible sourcing to meticulous waste reduction, the budget encourages a sustainable shift within the hospitality sector.

 

 

• · There was no reduction in the 20% hospitality and tourism VAT, despite a long-running campaign from trade bodies, MPs and business owners.
• · No mention of reintroducing the VAT rebate for international tourists. 
• · There was also discussion of wine tax, which are due to come into force in February 2025. This will see one rate of duty replaced by up to 30 different payable amounts from £2.45-£3.10 per bottle. 

 

 

For those navigating the ever-changing landscape of the hospitality sector, understanding these key changes is key. The extended VAT relief, reforms in business rates, and the emphasis on skills development and sustainability may have a large impact on your business.