OPEN LETTER: Terence Carvalho, General Manager of Becketts Southsea, wants clarity on what more is going to be done to help hospitality survive

Published by Rupert Douglas on January 6th 2021, 3:03pm

Dear Mr Sunak, 

As expected and rightfully so, England has been plunged into another national lockdown.

Whilst the support you’ve offered to the hospitality industry has been welcomed, I’m afraid to say that the levels of the proposed business grants will not be enough to keep the majority of hospitality businesses going.

With the one off grant of up to £9,000 announced today, our business is only entitled to claim £6,000 due to our rateable value being £45,250. Our overheads with the business being closed are in excess of £10,000 per a month. How are we meant to cover these ongoing losses off the back of a year that has seen our income literally halved?

The furlough scheme has been greatly appreciated and of course has thus far saved many jobs within our industry. However, this is due to expire in April 2021 and without an extension many businesses will not be sustainable and many more jobs/livelihoods will inevitably be lost. Also, the furlough scheme is only applicable if the employer is able and willing to pay NIC contributions. How can you expect this to be continued by businesses that have no income?

The reduced 5% VAT rate is due to expire at the end of March 2021. Will this be extended so that businesses can benefit from it whilst actually trading? There is certainly no benefit whilst our business is forcibly closed and has no income.

Hospitality as you will know is the 3rd biggest industry in the UK contributing 3.2 million direct jobs to the country (2017 figures from UKH). The social and economical impact of the hospitality industry is a major part of how our society is able to thrive.

Mr Sunak, I urge you to consider the following:

  • Value of grants increased for businesses forced with closure
  • Extension of the reduced VAT rate
  • Extension of the furlough scheme
  • Extension of the deferred VAT payment to 31 March 2022 (for VAT due 20 March – 30th June 2020)
  • Deferral of unpaid PAYE tax and NIC until 31 March 2022

If the above are not implemented, many more businesses within our industry will be lost along with countless jobs. If that happens, you must ask yourself “what has been the point of everything the government and our industry has sought to achieve over the past 9 months”? We ask you not to allow your well-conceived furlough scheme to become the unemployed waiting room for the hospitality sector.

I look forward to your response.

Kind regards

Terence Carvalho

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