Leisure & Hospitality Autumn Statement 2015 review
On 25 November, the Chancellor delivered his latest Autumn Statement. In a year which has already seen two Budgets, which have both brought big changes to the leisure and hospitality sector – most notably the new National Living Wage – businesses were perhaps understandably tentative about what this year’s Autumn Statement might bring.
In this article we summarise the key points arising from the Autumn Statement and focus specifically on what the changes may mean for the leisure and hospitality sector.
In summary (general):
- Tax credit cuts scrapped all together
- £12bn in targeted welfare savings to be delivered in full
- Small business rate relief to be extended for one more year
- NHS to receive £10bn more funding a year in real terms by 2020
- Basic state pension will rise by £3.35 to £119.30 a week
- New 3% surcharge on stamp duty for buy-to-let properties and second homes from April 2016
- Doubling of housing budget to £2bn a year
- Capital funding of transport projects to rise by 50%
- Increased devolution with 26 new or expanded Enterprise Zones announced
- Transport (37%), environment (15%) and energy (22%) departments all face funding cuts
- Extension of small business rate relief for one more year
- No news on retail business rate relief
- New £40m Discover England Fund
- Significant investments in UK transport links
- Bigger businesses hit by the new apprenticeship levy
- No acceleration of the new National Living Wage
Overall – not much change for the sector?
Scott Sanderson, Partner at Hawsons, commented: “This year’s Autumn Statement didn’t bring much in the way of change for pubs, restaurants and hotels…it was fairly uneventful, which will come as a relief to many. That being said, there are a few key announcements that will have an impact on the leisure and hospitality sector.”
“This was an Autumn Statement which brought some good news to the smaller business, and that includes those in the leisure and hospitality sector. The extension of the small business rate of relief for another year and the change to the apprenticeship levy, which will see only the biggest employers face increased costs, were positive announcements. The sector is already facing increasing tight margins ahead of the new National Living Wage, implemented in April 2016.”
“The introduction of the new apprenticeships levy will also impact the biggest operators. Businesses with a paybill in excess of £3m will contribute to the funding, so only those with more than 250 employees across the group are likely to be impacted. It is expected that as many as 98% businesses will now not contribute.”
Ahead of the Statement there were also suggestions that the introduction of the new National Living Wage could be accelerated, but that was not the case. A planned increase in the minimum pension contributions was also delayed.
Martin Couchman OBE Deputy Chief Executive British Hospitality Association said: “The introduction of the NLW from April 2016 will have a major impact on hospitality businesses’ finances so we are pleased to see a slight softening of costs through the decision to delay increases in auto enrolment pension contributions by 6 months from autumn 2017 and again in autumn 2018.”
A boost to UK tourism
Scott Sanderson, Partner at Hawsons, commented: “One of the most welcome announcements from the Autumn Statement for the sector was the new £40m fund to boost tourism and increase the number of visitors to the UK. Tourism plays a vital part in the growing success and long-term sustainability of the UK’s leisure and hospitality sector; this continued investment is undoubtedly good news.”
Investments in transport is good news
Scott added: “The ongoing substantial investments in the UK’s transport infrastructure also brings welcome news for the leisure and hospitality sector. Whether it brings in new customers or improving supply-chain efficiencies, better connectivity and transportation links can have a big impact on pubs, restaurants and hotels. Despite the funding cuts for the Department for Transport, the Chancellor pledged that capital funding of transport projects will increase by 50% by 2020, which is really encouraging.”
For more information
More from our leisure and hospitality experts
You can find all of our latest hospitality sector news and newsletters here.
If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.
Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.