Tax Relief

Restaurant teams endure £ 673 million in losses as cooks demand tax breaks

Monday, January 10, 2022 6:45 a.m.

Eight in ten have lost confidence in the prime minister to help them tackle the public health crisis, as the survey of 2,000 UK companies found, as resilience begins to wane in the face of the latest wave of Omicron at the turn of the year.

Losses for the country’s leading restaurant groups soared to £ 673 million in one year as chefs asked for more money to support ailing eateries.

According to an analysis of the corporate accounts of accounting firm UHY Hacker Young, losses in the top 100 groups rose 174 percent in the year through September 2021.

Companies faced closings and uncertainty about Covid rules last year, but have not seen a “painless recovery of wealth,” thanks to pandemic debt, said Peter Kubik, partner at UHY Hacker Young.

Consumer confidence has also been hurt in recent months after Omicron’s new version of Covid spiked cases in the weeks leading up to Christmas.

Restaurant chains, including Prezzo, Byron Burgers, and Carluccio’s, went bankrupt amid the pandemic, while others, Frankie & Benny’s and Pizza Hut, closed locations and used CVAs to keep their businesses afloat.

“Many restaurants struggle to pass the increased food and labor costs on to customers, which puts pressure on margins again. Omicron is just the latest setback for an industry that has been hit hard in the past two years, “added Kubik.

The venues also expect a risk of falling consumer spending after a hike in national insurance this spring, Kubik said.

The warnings come as Sacha Lord, Parklife founder and night economics advisor for Greater Manchester, has described the current level of government support as “unforgivable”.

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The catering minister is “quite busy” and is defending the current level of government support

“This is the second Christmas that is lost for hospitality. This time, however, the support wasn’t even worth mentioning. We are now starting to see the result of Rishi Sunak’s silence, ”Lord said on Twitter.

The Treasury Department announced £ 6,000 in cash grants for pubs and restaurants hit by recent Covid measures last year.

Industry leaders, however, said the grants were just a drop in the ocean, calling for the upcoming tax hikes to be postponed.

In the wake of the Covid measures directing office workers to work from home, the British Beer & Pub Association estimated that pubs were selling 37 million liters less over Christmas.

That drop in trade totaled £ 297million, with more than 3mn in early December.

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