Guest writing for CLASS, Nick Gillett, MD at Mangrove Global, urges the UK hospitality industry to stand up to punative taxation.

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But now’s the time for that to change.

In advance of what will likely be another disastrous budget from the Chancellor of the Exchequer, this is my call for the hospitality and spirits industries to become activists. To shout loud about the damage being done in the hope that our hopeless government will finally listen. Here’s why it’s time for us all to get out from behind the bar and onto our soapboxes.

We’ve become a target

The UK Government (in all its colours and political persuasions) has been targeting spirits and hospitality for years now. The end of post-Covid rates relief; alcohol duty hikes; inflation; energy costs; the fact that people have less money in their pockets – all disproportionately affect our industry. And that’s in an environment that’s already bad for business. Other sectors are struggling with the high cost of employment and tax; but we’re also being hit by exorbitant alcohol duty, energy costs, and unmanageable business rates.

Whilst high-tech startups get private equity funding and tax breaks, (whether or not they ever generate a profit or bring anything to the economy) independently run enterprises that do generate profit are hit hard. And more blows are being dealt with every budget. Most venues on the high street and spirits brands have come into existence through the bloody hard work of someone who loves what they do. But there is no incentive to do that anymore; you’ll be taxed to the hilt, stressed by an increasingly complex regulatory landscape, and if you do manage to build something special, you can’t even pass that business on to your kids without them losing half of it to inheritance tax.

The greater good of hospitality

I’ve said it before – hospitality really can be the UK economy’s golden goose. If treated right, we offer abundant employment opportunities, up-skilling, we generate profit at every point of our lengthy supply chain, right back to the farmers who grow the raw ingredients in our booze. We are a cheat code for economic growth, but one being strangled by a government who claims that growth is the strategy, only to then act oppositely.

Increasing wages to a better standard; looking after the NHS and education; driving forward a green agenda; these are all so important. But you need the engine of successful business to generate the money to invest into these priorities.

A glimpse at utopia

“So, what’s the answer Nick?” I hear you say. Burn it all and start from scratch to create a low tax environment that rewards risk. Scrap the alcohol duty escalator and fix it somewhere for at least a few years. Bring back a higher business rates relief and reduce VAT for hospitality venues. Give us some certainty and let businesses plan beyond the next budget. And make a bigger, more sweeping tax change that affects all industries, instead of unfairly punishing ours. Above all else encourage the public to get back out onto the high street and into their local venue.

Long term we’ll survive, but we’ve already lost so many great operators – one a day this year - largely due to a government that’s bad for business. That’s why we need to act. We need to be so loud that they can’t ignore us anymore. Join trade bodies like UKHospitality, speak to your local MP, talk about it with your colleagues and raise awareness to anyone who will listen. Spirits and hospitality are full of creative individuals, buzzing with energy – and it’s time we poured that energy into advocacy. If we don’t, there could end up being a lot less glasses for us to fill.