‘Better days on the horizon’ for Lancaster leisure and tourism firms
The prospect of better days is on the horizon for Lancaster leisure, hospitality and tourism businesses if they use the full breadth of Government support available to get through the next few weeks, one of the region’s leading business advisers has claimed.
Colin Johnson, partner at Lancaster-based chartered accountants and business advisers MHA Moore and Smalley, issued a ‘hold on’ message to businesses following last week’s budget announcement which included an extension to the furlough scheme to September as well as £5 billion of ‘restart’ grants for the hospitality and retail sector.
The announcements also included an extension to the five per cent VAT rate for hospitality and leisure firms as well as business rates holidays until June.
Colin said: “The UK hospitality sector is breathing a sigh of relief as the Chancellor seems to have listened to its pre-Budget requests.
“In particular, the extension of the five per cent VAT rate for the UK hospitality sector for an additional six months up to the end of September 2021 is good news as it will cover the important summer season.
“It was also reassuring to see that from October 1, 2021 to March 31, 2022, the VAT rate will increase to 12.5 per cent before it returns to 20 per cent with effect from April 1, 2022.”
Colin discussed the prospects of a recovery for the industry over the coming months but highlighted that challenges remained for leisure, tourism and hospitality firms until they were able to trade fully and without restrictions.
“With the lockdown easing over the next three months, tourism and hospitality businesses in the UK will be hoping that this VAT reduction will encourage the British public to stay in the UK this year and make the most of UK resorts and destinations whilst supporting UK businesses,” he said.
“We believe the measures put in place can help the industry to bounce back, but there are still several weeks ahead where firms will be unable to trade.
“We would advise these businesses to speak to their adviser about how best to fully utilise the government support available to them to manage the period until they are able to operate without restrictions.”
Colin also advised businesses to begin planning now for their reopening to avoid potential issues with working capital.
He added: “These companies will be moving from an enforced closure straight into what could be a very busy trading period over the next few months.
“This will put pressure on their resources if they do not plan effectively and we would advise pubs, restaurants and other hospitality businesses to begin these preparations now to ensure they have sufficient working capital in place to manage this reopening.”