North-east hospitality sector welcomes Chancellor’s furlough extension and VAT relief

Stephen Gow, chairman of Aberdeen City and Shire Tourism Awards
Stephen Gow, The Chester Hotel general manager

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WELL-known figures in the North-east hospitality sector have welcomed the move to extend the Government’s furlough scheme until the end of September and a continuation of the VAT reduction.

The furlough scheme, which pays up to 80% of salaries to those who cannot work because of Covid-19 restrictions, was scheduled to stop at the end of April.

However, in his Budget speech today Chancellor Rishi Sunak announced that the scheme would now continue until the end of September.

The continuation of the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022, was also confirmed.

Stephen Gow, The Chester Hotel general manager, said: “Any form of support for the hospitality industry and the individuals employed across such a diverse sector has to be welcomed.

“The continuation of the VAT reduction to 5% for six months to the end of September is a welcome measure and the proposed staged increase of VAT will be of assistance.

“An extension of the 5% until at least the end of the year would have given businesses a more stable platform from which to plan operational and financial recovery.

“The hospitality sector has been one of the hardest hit throughout the course of the pandemic and it faces a long journey back to pre-pandemic days.

“Extended furlough will allow us, as business returns, to phase the return of our team to the business to meet its needs which will be helpful.

“It’s good to see the Chancellor acknowledging that the hospitality sector has been badly hit and will reopen with more restrictions and we await details on the new Restart grants for English hospitality businesses which the Chancellor has said will be up to£18k.

“Scottish businesses need this to be echoed in Scotland.”

David Littlewood, award winning chef owner of The Tor Na Coille in Banchory and The Kildrummy Inn by Alford, commented: “It’s reassuring that furlough is being extended, and that the extension is for a longer period than initially predicted. The VAT reduction period extension is also welcome as is the news that there will be a phased increase back to the 20% level.

“However, the VAT reduction is only supportive for business when they are actually generating revenue; no hospitality business will benefit immediately from this whilst we remain closed.

“Furlough will definitely be of benefit as hospitality businesses reopen, giving us the opportunity to assess how we will be trading in the coming months.

“We should also remember that we still have no idea what re opening will ‘look like’; whether there will be new restrictions, new regulations, different opening hours, with alcohol, without alcohol.

“’Pivoting’ a business is exhausting and we need to know now how and when we can open so we can fully appreciate the Chancellor’s measures announced today.”




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