Calls for Chancellor to help hospitality businesses in Teesside
Rachel Reeves is setting out her spring statement later
Last updated 1st May 2025
All eyes will be on the Chancellor tomorrow as the Spring Statement is set to be revealed.
The "mini-budget" will provide an update on the Government's current spending against financial objectives they set out.
Liam Percy is the owner of LunaBlu, a tapas and cocktail bar on Yarm high street, and he said: "The past year's been quite a difficult year. We extended just prior to the beginning of this year and obviously at the time, we thought we were in a stable economy but as it happens we've already seen a downturn in the economic climate and we've yet to see the impact, so we're feeling very nervous about the next 12 months.
"We're literally working on single figures and I'm talking two and three percent of our turnover, which doesn't give us the opportunity to collect money to then refurbish and maintain business even at its present standard, so without putting in personal money, it becomes very difficult to see a long term future in hospitality.
"I think we're seeing customers coming out less so they're coming out more for events; the birthdays, the christenings and less on a sort of weekend basis. Having said that, the turnover is there but they are becoming a little bit more price conscious, once a month maybe rather than once a week type of thing.
"I don't think the Chancellor has a lot of wiggle room. She's just increased NI and she can't take that down, she's increased the hourly rates and she can't take them down, she's removed the business rates so the only thing she's got left is VAT and I can't see her actually doing anything with that, but VAT would be the biggest area for me that the Chancellor could help hospitality in.
"What we pay quarterly, people would be amazed. One bar and we can pay £30,000-£40,000 a quarter in VAT and that's even when we're losing money. People think you're only taxed on profits, you're taxed on turnover in this industry. And if we don't make money, we still pay our VAT and we lose even more money, so it's becoming so difficult."