In his bi-monthly column, F&B expert Matt Harris serves up food for thought (with plenty of takeaways advice) from the inhospitable world of hospitality.
I’m still catching my breath after last week’s Budget.
Chancellor John Healey stood up at the despatch box on 28 October and declared he was giving small businesses “breathing space”. I don’t know what kind of air they’re breathing in Whitehall, but from where I’m standing behind the bar at Planet of the Grapes, it feels a lot like suffocation.
If you run an independent restaurant, pub or café, this Budget was a Westminster masterclass of dangling a carrot with one hand while quietly picking your back pocket with the other.
Let’s start with the headline carrot. From April 2027, the Small Business Rates Relief threshold for retail, hospitality and leisure properties is rising from £12,000 to £18,000, pulling around 70,000 premises out of business rates entirely. Plus, there’s a two-year freeze for properties above that.
That’s fabulous news if your rateable value scrapes under £18K. But as the FSB pointed out, the sector needed a £25,000 threshold just to reflect post-inflation reality and, more importantly, April 2027 is five months away.
A pledge that doesn’t kick in until next spring does nothing to help cash-starved venues survive the brutally quiet January and February grind. And that’s assuming commercial landlords don’t simply soak up the difference the moment lease renewals roll around.
Now look at what was taken out of the other pocket.
The National Living Wage is jumping another 3.9% to £13.21 an hour. Nobody begrudges staff a fair wage, and I know my hospitality teams work harder on their feet than almost anyone in Britain. But when payroll costs hike without a single millimetre of movement on Employer National Insurance contributions, it’s a direct tax on putting people to work.
UKHospitality begged for the Employer NI threshold to be lifted to £10,000 to give labour-intensive venues a fighting chance. What did we get? Crickets.
Energy bills? Heavy industrial factories and domestic households got state cushions, while the independent venue running an energy-guzzling kitchen, glasswashers and cellar cooling systems for 16 hours a day got left out in the cold.
VAT? Still locked tight at 20%. The 10% hospitality VAT cut that could have genuinely transformed high street survival wasn’t even mentioned.
And don’t get me started on the big headline winner that is Founders’ Relief, which cuts Capital Gains Tax to 10% on exits up to £10 million for high-growth tech firms. I’m genuinely thrilled for the software founder pitching VC term sheets in Shoreditch. Utterly irrelevant to the publican serving pints in Leeds or the bistro owner in Bristol wondering how they’re going to settle quarterly supplier invoices this Friday.
They halved Business Asset Disposal Relief for everyday business owners selling up from £1m to £500k, offered paper-thin promises on business rates down the road, and left our current wage, tax and energy bills untouched.
If that’s the Treasury’s idea of “breathing space”, independent venues had better hold their breath and cross their fingers.
Don’t sit around waiting for April 2027 to balance your books:
1. Check your rateable value today: Go to the Valuation Office Agency (VOA) portal and check where your property sits against that £18,000 line. If you’re hovering just above it, look into a formal Check, Challenge, Appeal (CCA) to see if you can get re-evaluated beneath the threshold before April 2027.
2. Audit your tronc right now: With minimum wage rising to £13.21, having a compliant, independent tronc setup is mandatory. Distributing card tips through standard payroll rather than a certified tronc means throwing away both employer and employee National Insurance on every penny of service charge.
3. Model the 3.9% wage bump ahead of April: Run your rota figures against £13.21 today. Look hard at table turn times, prep schedules and quiet midweek shift structures now, so you aren’t forced into knee-jerk cuts when the rate officially changes.
That’s my post-Budget rant out of the way, but I want to know if anyone out there is actually raising a glass of Pinot to this £18K threshold. Have your say below. I’ll tally the results and report back on whether the sector feels thrown a lifeline or thrown under the bus.
Got a gripe about the Budget, your business rates bill or the latest bit of red tape standing between you and a decent Friday night? Email us at hello@startups.co.uk with the subject line “Send Matt a moan”.
We’ll pick the best (and angriest) complaints and respond to them in the next issue.
Matt Harris – Founder of Planet of the Grapes
Matt started his Food & Beverage journey aged 19 working at Thresher's in Brixton. With a WSET diploma in wine and spirits under his belt, he went on to establish wine merchants Planet of the Grapes in 2004. Now – at the ripe old age of 52 – Matt's empire includes multiple venues around London including bars in Leadenhall Market and East Dulwich as well as restaurant Fox Fine Wines & Spirits at London Wall.
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