Covid Scotland: Hospitality leaders call for further tax breaks after ‘massive impact’ of Omicron

Hospitality leaders have called for further tax breaks to help keep the sector afloat following huge losses sustained over the Christmas period.

Leon Thompson, executive director of UKHospitality Scotland, said the restrictions and public health messaging had "impacted massively" on the industry.

He said it was "very disappointing" that businesses were still waiting for funding announced in the wake of the Omicron variant to be paid out.

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First Minister Nicola Sturgeon previously announced a support package totalling £375 million.

This includes £66m for hospitality businesses hit by the cancellation of Christmas parties and £10m for those most affected by the requirement for table service.

A total of £5m has been earmarked for nightclubs forced to close.

Giving evidence to Holyrood’s economy and fair work committee on Wednesday, Mr Thompson said: "The funding, as far as I'm aware, is still actually making its way out to businesses, which is very disappointing, because this was really money that was needed in the immediate aftermath of announcements from Public Health Scotland and then restrictions being imposed by the Scottish Government.

"So while the money was helpful when it was announced, we still have businesses waiting to receive their funds."

Mr Thompson said the hospitality sector needed as much support as it could get.

He said: "The big focus for UKHospitality Scotland is pushing the UK Government to retain VAT at 12.5 per cent.

"That's a key measure that would make a big difference to hospitality in the coming months.

"With the Scottish Government, a conversation around business rates relief and whether the 50 per cent, which is in place through from April ‘til the end of July, can now perhaps be extended further through the financial year, particularly given the losses incurred by businesses over Christmas and New Year."

Retail, hospitality and leisure firms are due to receive 50 per cent rates relief for the first three months of the 2022/23 financial year, capped at £27,500 per ratepayer.

Stephen Montgomery, of the Scottish Hospitality Group, also called for business rates to be reconsidered.

He said: "We really need to look at that very, very soon so that we can look at how we save businesses money going forward.

"Because this recovery isn't going to happen overnight. Customer confidence is really, really low."

He said the average small to medium-sized pub had debts of between £80-£85,000, while the figure for nightclubs is between £160-£175,000.

Last month, a survey conducted by the Scottish Tourism Alliance found one in three tourism and hospitality businesses fear they are at risk of collapse this year.

SNP finance secretary Kate Forbes has said the Scottish Government is "acutely aware" of the impact of restrictions over the key Christmas trading period.

In an update to MSPs published on Tuesday, she said: "As we have done throughout the pandemic, we have worked closely with businesses to understand the impact of the Omicron variant and the necessary restrictions introduced.

"Businesses asked us, where possible, to target funds at those most impacted by measures introduced in December, rather than blanket funding.

"It takes a bit longer to get these targeted schemes set up and therefore money paid out, but means businesses hardest hit will get more money."

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