No eat out to help out – but Chancellor gives the hospitality and leisure sector an opportunity to rebuild

Global head of hospitality and leisure at KPMG, Will Hawkley comments on announcements made by the Chancellor in today’s Budget

Will Hawkley comments on announcements made by the Chancellor in today’s Budget

Commenting on announcements made by the Chancellor in today’s Budget, Will Hawkley, Global head of hospitality and leisure at KPMG said :

‘’Measures announced by the Chancellor recognise the devastating impact that the pandemic has had on the hospitality and leisure sector, and go some way to supporting operators through the short-term challenges to come, although at the heart of it all they just want to be open and serving customers again.

‘’Extensions to vital Covid support packages and a freeze on alcohol duty will be welcomed as will access to restart grants of up to £18,000 per premises. The recovery loan scheme - assuming payments can be made speedily – should provide some temporary relief as operators face a long wait until they can reopen.   The extension of the 5% VAT rate until 30 September 2021 followed by a 12.5% rate until April 2021 provides the sector with an opportunity to rebuild as it reopens in line with the Government’s roadmap.

‘’The extension of the business rates holiday until the end of June, followed by a two-third discount until the end of March 2022, will give operators in the sector time to catch their breath and re-build their businesses after a difficult year. However, the time bomb of the backlog of rent still remains.  This could be a massive issue for pubs and restaurants who need to know when and how this debt will be repaid and could be catastrophic for some operators once government support ends. 

‘’The pandemic has shone a light on some long held issues impacting the hospitality sector, including the rise of online channels, the review of which was not mentioned today.  The question of how best to design a new system of taxation for our diverse hospitality and leisure sector is one that requires detailed analysis from the Government. The current business rates system has failed to keep up with the pace of change that the sector has faced over decades, but it’s important to get any reform right.

“In addition for the need to address the business rates issue, there is a broader operator versus property owner agenda that needs resolving. The key aim has to be for operators and landlords to work more closely together, with changes such as the introduction of turnover-based rents becoming more commonplace. However, large numbers of rent payments are still not being made, and without a change to the current system, the knock-on effect could see more pubs and restaurants fail, and retail landlords unable to keep up with their financial obligations. This will have much broader term implications for the overall economy.’’   



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KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff.  The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.

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