BUDGET UPDATE - WE ARE NOT SHOUTING - BECAUSE WE ARE TALKING
28 November 2024
Four weeks on from the UK Budget, we have built what we believe to be a strong, data-driven case for why hospitality and tourism businesses in Northern Ireland deserve help to weather the storm caused by the combined impact of the increase in ENIC, compounded by a significant increase to the Living Wage.
We have commissioned extensive research and modelling by economic, financial, and tax experts, which clearly demonstrates the impact of the budget, and that for many businesses in our industry, the situation is simply un-survivable in their current state.
Our hospitality industry is the backbone of our tourism offer, which is a key element of the NI Assembly’s Programme for Government.
Our industry has created new, industry-led qualifications and career pathways, creating Good Jobs, which is a key element of the NI Assembly’s Programme for Government.
If the NI Assembly is to deliver the economic targets set out in the Programme for Government, then they need to recognise both our role as a delivery partner and our plight as an industry partner - because the NI Assembly needs us as much as we need them!
We know every business sector is being squeezed and seeking help, but we are an industry that was the worst affected by the economic impact of the pandemic. Debt-ridden as a result, we never got a chance to recover before being again the worst affected by the impact of the cost-of-living crises, and now facing a critical situation as April 2025 looms ever closer.
We have gathered our evidence and are now in talks with Government departments, laying out our arguments, backed by detailed proposals on the support required.
We are calling on the NI Assembly:
Interim Support Package
- To provide hospitality and tourism businesses with an interim financial support package to help offset the damaging impact of the UK Budget.
Business Rates Support
- To continue the current pandemic recovery rates relief (secured by Hospitality Ulster), which currently provides between 20% – 30% rates relief to pubs, bars, and hotels. Due to end in April 2026, its removal would extinguish any hope for hundreds of businesses in our sector.
- To restructure the business rates system and move to a fairer, banded business rate system (variable multiplier) that better recognises the different sectors’ profitability.
- To introduce a District Rates Cap to curb excessive rises in district rates by Local Authorities, forcing them to make savings rather than further burden businesses with increased costs due to inefficiencies.
VAT Reduction
- For the Department of Finance to undertake their own research on the economic benefits of a reduced VAT rate for hospitality and tourism in Northern Ireland.
- For the NI Executive, backed by the Department of Finance research, to make the strongest case to UK Treasury for a reduced hospitality & tourism VAT rate in Northern Ireland.
We are calling on Westminster:
VAT Reduction
- To introduce a reduced rate of VAT for the Hospitality and Tourism sector, inline with almost all other countries in Europe.
ENIC Changes
- To create a new employer NICs band from £5,000 to £9,000 with a lower rate of 5%, or
- To implement an exception for lower band taxpayers working fewer than 20 hours per week, targeting support for part-time and lower-paid workers.
Research shows that there is continued consumer demand and a future for hospitality businesses, but the numbers simply will not add up come April 2025.
To support our campaign, we are calling on all hospitality businesses to email your MLA and let them know just how bad the situation is for you personally. They say all politics are local - so let’s make sure they know that this is a local issue that won’t go away!
To do this:
This is phase one of our lobby and, if successful, introducing legislation to provide financial support may take time, but we need an early and firm commitment of support from the NI Executive.
If the talks do not deliver the support we deserve, we will seek the views and backing of our membership on our next course of action. Because our voice must be heard and, above all, listened to!
We must also seek to reassure and retain our staff as we head into what needs to be a busy Christmas period. To this end, despite the challenges we face come April 2025, we have decided to proceed with the Carnival event in February 2025 as a way of both retaining and rewarding your staff, and hopefully lifting their spirits.