Budget reactions: What was missed

There was good news for the hospitality and nightlife sector with the announcement of the budget with the alcohol duty escalator scrapped and 1p being cut from beer tax. But it was not all good news, many things the industry has been campaigning for were missed out or ignored entirely.

Which issues were missed out?

One of the main issues that the hospitality and nightlife sectors will be disappointed about once again is their campaign for a VAT cut being ignored. This cut would affect hotels, bars, pubs and nightclubs and has been something the industry has been campaigning for.

A change in the Enterprise Investment Scheme (EIS) to include hotels was also ignored, prompting Martin Couchman, the deputy chief executive of BHA to argue that ‘Hospitality businesses should be brought back into the Enterprise Investment Scheme.’

This is due to the problems that smaller regional hotels encounter when trying to secure bank finance to assist with refurbishments and improvement of services.

Another issue which was not addressed was a cut in employer’s National Insurance. This would help create more employment opportunities and help to protect the jobs of those already in the sector.

Other new budget changes

Aside from the well publicised 1p beer taxation cut, other changes that affect pubs, hotels and other nightlife businesses took place.

Business allowances

One change that will bring a positive effect on the hospitality and nightlife industries is the increase in investment allowances. Investment allowances for businesses have now doubled to £500,000 until the end of 2015.

Ufi Ibrahim, Chief Executive of British Hospitality Association stated that this step was a ‘small signs of recognition from the Chancellor’ for the sectors, but went to argue ‘there are other more lucrative ways to increase our competitiveness as a nation, for example by funding more improvements to obtaining tourist and business visas and the reduction of tourism VAT.’


Apprenticeship grant for small businesses extended to support 100,000 more apprenticeships. This is not only a good thing for the industry as apprenticeships help support the bar and nightclub industry, it’s a positive step assisting young people with getting into employment.

Kate Nicholls, the strategic affairs director of ALMR agreed, saying that the ‘extension of apprenticeship grants for small businesses ensures that the eating and drinking out sector can continue to lead the way in apprenticeships.’

Whiskey duty frozen

Not only has beer been made cheaper by the introduction of a 1p duty cut, Whiskey also had it’s duty frozen.

Much of the manufacturing of Whiskey is located in the UK, so the industry was relieved they have received a some form of respite in the difficult economic climate.

Katie Corrigan from the Hospitality & Leisure team of Tods Murray Solicitors said that the ‘Whiskey duty is to be cut is excellent news’ and illustrates ‘impact of tough trading conditions over the last few years.’

Robust insurance supports all elements of the hospitality and nightlife industries by protecting the owners and giving businesses a lifeline if the worst should happen. We have a well earned reputation in this sector, so to get in touch with one of our experienced insurance professionals, call us on 0844 488 9205 or use our contact form.

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