The recent Autumn Statement, delivered on the 22nd of November 2023 by Chancellor Jeremy Hunt mentions many changes that are set to influence the majority of the UK’s population. We’re here to lay out the key proposals which will have a profound effect on the Hospitality Sector.
There has been a further freeze on Alcohol duty until August 2024.
The National Living Wage is set to increase by almost 10% up to £11.44 from £10.42. The National Living Wage will also be extended from 23 to 21-year-olds.
With a large number of the hospitality workforce being of this age group and the pay rise being extended even to the National Minimum Wage (for 18-20-year-olds) up to £8.60 per hour. It raises the question of how many SME Hospitality businesses will be able to continue with their current numbers of staff, on top of energy bill prices.
The Chancellor declared that he would implement a reduction in Employee National Insurance from 12% to 10%, marking a 2% cut. This change is set to take effect beginning January 2024.
Starting from April 2024, the Class 4 National Insurance Contributions (NICs) for self-employed people will be lowered from 9% to 8%. Furthermore, no self-employed person will be required to pay Class 2 NICs.
It should be noted that employer contributions to NI will not be cut.
Businesses in the Retail, Hospitality and Leisure sectors will continue to receive a 75% business rate discount for a year. But the Chancellor notes that this will not continue indefinitely.
The Chancellor, however, stated that there would be an increase in the standard multiplier. As a result, businesses with properties that have a rateable value of £51,000 or more will witness a 6.7% rise in their business rates bills starting next April.
Overall, there is relative dissatisfaction throughout Hospitality, as there was a failure to announce any additional support measures other than those already in place. The extended freeze on alcohol duty and the 75% discount are small winnings for the sector from this announcement. But bring alongside them large changes to wages and the standard multiplier, and no permanent solutions. For many within the sector, there may well be trying times ahead in the new year as undoubtedly hospitality businesses will have to find ways to cut costs.
For more information on how this Autumn Statement will affect your business, and help manage the complex financial situation that you may find yourself in this coming year, get in touch with ETC Finance.