Towards the end of October, we all waited nervously to see how Chancellor Rishi Sunak’s budget announcements would affect the hospitality sector.

And now we know, it’s a mixed bag – but there are positives for one of the industries most impacted by Covid-19 restrictions.

Here are what some of the main points of the Autumn 2021 budget mean for businesses the Chancellor described as ‘hardest hit by the pandemic’.

Hospitality business rates

A 50 percent reduction in business rates for qualifying businesses in hospitality, leisure and retail (up to a maximum of £110,000) was a welcome declaration.

This will provide much needed relief, especially for smaller businesses, ahead of a full revaluation in 2023.

It should also help close the overheads gap between online sellers and physical hospitality premises.


Many were disappointed that the temporary reduced rate of VAT wasn’t extended beyond the April 2022 deadline.

With the rising costs throughout the hospitality industry, it was seen by several operators as an obvious solution.

As such, the return to the standard 20 percent from the current 12.5 percent rate is likely to put pressure on several businesses next year.

Alcohol duty

One announcement met largely with approval was the simplification of alcohol duty – although these changes will be under review until the end of January.

A planned increase of duty on spirits, wine, beer and cider was scrapped, with the new reformed system including:

  • Higher rates for stronger drinks and lower for weak ones such as rose wine, fruit ciders and non-premium beers
  • No more confusing duty of 28 percent for sparkling wines – switching instead to the same rate of non-sparkling wines of equivalent strength
  • The biggest cut to beer and cider duty for several decades – five percent (if served from containers of 40 litres or more)

National living wage

With the NLW rising from £8.91 to £9.50 – a percentage increase almost double the rise in the cost of living – recruitment is likely to be squeezed.

Similarly, the National Minimum Wage for ages 21-22 will rise to £9.18, with apprentices increasing to £4.81.

Unfortunately, for many smaller businesses, it may be a case of finding a way to do more with less.

Hospitality bounce back after the budget

Some positives and some negatives for most business owners in the industry in the Autumn 2021 budget – but a fairly blanket acknowledgement that costs are set to rise.

With that in mind, it makes sense to invest wisely in technology that supports your business goals by reducing waste and increasing customer retention.

If you’re interested in finding out more, please get in touch to request a free demo.

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