Don't ask for your 'penny off a pint'...

The Chancellor Rachel Reeves gleefully announced a 1.75% reduction in draught beer duty at the Autumn Budget on 30th October 2024, to the cheers of glee from Labour MP's in the House of Commons.

"Which means a penny off the pints at the pubs", she added.

Well, take care before asking your local landlord for your penny off as they're probably going to take great offence at the request.

What you may not realise is that a number of the other tax raising and saving measures announced by Mrs Reeves will hit hospitality hard.

Hospitality trades for long hours, proudly being available to serve local communities - often around 79 hours each week. Those hours need staffing, and hospitality is the UK's biggest employer of young adults - providing valuable life experience and training which help many to progress in future careers.

The triple-whammy announced in the budget will make staffing those long hours even more expensive:

1. National Living Wage (NLW) rises from 1st April 2025 from £11.44 per hour to £12.21 (+6.7% - an inflation busting increase for the fourth year running)

   
   

2. An increase in Employers National Insurance (ENI) of 1.2% to 15%

   
   

3. A reduction in the point at which employers have to pay ENI from £175 of wages earned in a week to just £96.15 - this means an employer will start paying ENI on any employee who works more than 8 hours in a week. That'll be most workers then - and for Lincoln Green pubs, points 2 and 3 above will mean a 73.6% increase in our Employers National Insurance contributions! (And yes, we have taken into account the increase in Employers Allowance from £5,000 to £10,500.)

Next up, we get to the thorny issue of business rates. Since the pandemic, the Government has provided a 75% reduction in rates payable for hospitality and retail. More bad news here from the Budget - this is being reduced to 40% from 1st April 2025. And the one thing that wasn't mentioned was that business rateable values are being adjusted from 1st April 2025 too - and I'd wager an increase is on the cards here too. Of course business rates are being overhauled in 2026-27, meaning potentially retail and hospitality may see a reduction from then, but that's 'jam tomorrow' if ever I heard it!

Finally on to the issue of alcohol duty; yes, the rate of draught beer duty is reduced from 1st February by 1.75%, but alcohol duty on packaged beer (bottles and cans), wines and spirits is going up by more than 3.5% - so overall, the cost of stock purchased for a pub is going up too. And do you really think pub tenants will see the benefit of the reduced rate of draught beer duty? Probably not, when the brewers are facing the same increased to their staff costs and Employers National Insurance payments.

So, all in all it was a pretty grim budget for those in the hospitality and brewing sectors. Please don't complain if we don't give you that 1 pence reduction.....