Budget 2014: Hospitality Industry Reaction

The UK hospitality industry was listening closely to George Osborne yesterday, as the Chancellor delivered his 2014 Budget Statement. But if you were hoping for the much-anticipated VAT reduction for UK hospitality businesses or changes to the Enterprise Investment Scheme for hoteliers … well, then you will have been disappointed.

The reality is that this budget was rather uninspiring for the UK hospitality industry as a whole. Many pundits have noticed that with the country only in the early stages of growth, the Chancellor effectively had his hands tied. Yet, many of the schemes campaigned for have strong economic benefits supporting them.

This fact evidently evaded Osborne on this occasion.

Benefits for Hospitality

But it wasn’t all bad news! A key announcement was the scrapping of the alcohol duty escalator and cutting beer duty by another penny. This move makes Osborne the first chancellor in recorded history to cut beer duty two years in a row.

Annual investment allowance was also doubled to £500,000 until end of 2015. It is predicted that this will translate into 99.8 businesses paying no tax on investment during this period. There have been calls, however, that the timeframe of this announcement is very short for SMEs and there will be industry pressure to increase this.

Air Passenger Duty branding was also reformed which will make long distance flights cheaper for those returning to the UK.


The most welcome news for UK hospitality professionals will undoubtedly be the extension of the government grant for small businesses t o support 100,000 more apprenticeships.

“The UK hospitality and tourism industry is operating in the most fiercely competitive international market and we need to be looking outwardly and creating financial policies which allow us to better compete with countries who are already acknowledging this like France, Germany, Spain and Italy,” explained British Hospitality Association CEO, Ufi Ibrahim.

“ Today’s Spring Statement showed some small signs of recognition from the Chancellor on issues like APD, the Apprenticeship Grant and the Annual Investment Allowance, which the BHA welcomes, but there are other more lucrative ways to increase our competitiveness as a nation, for example by funding more improvements to obtaining tourist and business visas and the reduction of tourism VAT.”


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