HOTELIER Stephen Leckie, chief executive of Crieff Hydro, is all for businesses paying their fair share of tax. But he warned the multiplicity of taxes faced by hospitality businesses risks the health of one of Scotland’s most important industries.
Chancellor Philip Hammond announced that the Living Wage would rise to £7.50 per hour for workers over 25 from April.
Mr Leckie said the Living Wage had already cost the Crieff Hydro family of hotels, which includes Peebles Hydro and The Isles of Glencoe and The Ballachulish hotels on the west of Scotland, an extra £400,000 since the £7.20 rate was introduced last year.
Alongside the Living Wage the hotel company, which has more than 500 staff, will have to pay £80,000 a year under the new Apprenticeship Levy from April.
Mr Leckie, who believes the Living Wage should be set higher in London than elsewhere in the UK, said: “I’m not arguing against the concept of it, but the fact is it comes at a cost. That £400,000 extra means you can’t reinvest that money in other things.” because you have spent it on other things.”
“We are anticipating further and continued rise [in the living wage] – I just hope that Philip Hammond realises the impact that these compulsory increases make on businesses.”
Mr Leckie added that the UK Government does not take into account the extra cost burden the Living Wage brings for hotels such as Crieff Hydro, where “living in” staff are given £5 towards their lunch.
“That’s 50p an hour. There is no offset to that, according to Living Wage calculations,” he said. “And that is quite a big thing for this sector. Paying Living Wage is fine, but if you can’t invest back into the industry, then customers see it.”
Mr Leckie was disappointed but not surprised that the Chancellor did not reduce the level of VAT paid by hotels, pubs and bars, as he believes halving VAT would have a dramatic effect on the hospitality and tourism industry.
Mr Leckie said: “The worry we have in this industry is the quantum of tax we pay, including levies. I’d love the Chancellor to take a view on reducing the VAT for this industry.
“That would make a big difference to our ability invest and make things better in the industry – on quality, training, improvements, capital spend. That would be the single biggest thing, a reduction in VAT. Am I going to hold my breath for him to do it? No.”
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