What the Autumn Budget could mean for UK nightlife

The new Labour government unveiled its Autumn Budget today (October 30), following weeks of speculation over potential tax rises, public spending cuts and more — particularly what "tough choices" will be made in respect to the economy.

With individuals and businesses in the nightlife sector having been heavily impacted by the ongoing cost of living crisis, many in the industry have been anxiously awaiting the contents of Chancellor Rachael Reeves' first budget.

Ahead of the budget's announcement in parliament this afternoon, Night Time Industries Association (NTIA) CEO Michael Kill had urged the government to "extend business rates relief, freeze alcohol duty, support local independent cultural businesses and address energy costs" within the budget, to prevent "a mass exodus" of nightlife businesses by 2025.

"We can’t afford to wait for long-term reform while businesses disappear," he warned. "we need action now to stabilise the sector and protect the future of our industry.”

Read this next: One in three young people are "cutting down" on nights out due to Cost of Living Crisis

Now with the budget here, what will Labour's economic plan mean for nightclubs, musicians, promoters, you - the clubber - and everyone else in the nightlife industry?

How will nightclubs, bars and pubs be affected?

While the current business rate relief for the leisure and hospitality industry has been extended, following its introduction during the COVID-19 pandemic, it will be reduced from 75% to 40% from April 2025.

The NTIA has said the relief rate extension will be "swallowed up" by other changes in the budget, such as National Insurance Contributions (NIC) to 15%, the lowering of the pay threshold required to pay NIC for employees from £9,100 to £5000, and a rise in the national minimum wage from £11.44 an hour to £12.21 an hour.

CEO Michael Kill says that "although rightly intended to support the workforce" the the changes "will have severe repercussions for already struggling businesses across the sector."

"This shows an acknowledgement of core businesses within nightlife but lacks consideration for the broader industry outside of bricks and mortar businesses and the vital and diverse role our night-time economy plays within our communities and the UK’s culture and economy," he added.

Alcohol duty is also set to rise by 2.7%, despite a 1.7% reduction in draught-served beverages (ie: beer and cider) in venues — or "1p off a pint". The price of alcohol was one of the key pressures mentioned by nightclub operators in Mixmag's Cost Of Living series.

How will nightlife workers be affected?

The Low Pay Commission estimates that 46% of workers in the leisure and retail sector are on national minimum wage, so the 6.7% increase to £12.21 will be a welcome relief for many in the industry.

Similarly, extending the cap on bus fares at £2 per journey will be helpful for those who use public transport to get to and from work.

While Reeves confirmed a tax rise on individuals in the future, she insisted this would not come until 2028/29. However for freelancers - particularly those working for agencies - the NIC increase along with the lowering of thresholds, could eat into take-home pay.

Employment status expert Rebecca Seeley Harri explained to The Independent: "Potentially if there’s an employer’s rate rise, it will end up reducing the amount that the umbrella company worker gets because of the way the pay is structured.”

“The assignment rate is the rate that they tell the workers. They might say, you’re going to get £500 a day. The problem is, by the time the worker actually gets it, all the taxes, the margins, everything comes out of that £500.”

On the impact on nightlife workers, NTIA CEO Michael Kill said: "Long-term reforms in planning, employment rights, and worker exploitation are transformative for the sector, though they bring challenges to an already delicate ecosystem."

"Given current inflationary pressures, some of the businesses we represent may not survive the outcomes of these reforms," he added.

How will you, the clubber, be affected?

While many club-goers will not see higher taxes in their take home pay, and may see more disposable income by way of changes in carers allowance, public transport cost freezes and a continued cap on fuel duty — the cost of going out may increase due to added pressure on nightlife venues.

While the decrease in draft alcohol duty will be welcomed by pint drinkers, the overall increase in alcohol duty on everyone else could see the cost of spirits, bottled beers and cocktails increasing.

Duty on cigarettes will rise in line with inflation by 2%, while the duty on rolling tobacco will increase by a huge 10% — the government is also set to introduce a levy on vaping liquid similar to that of cigarettes, with disposable vapes set to be banned in 2025.

How will artists and cultural institutions be affected?

Artists and wider cultural organisations that exist within the nightlife industry could be affected by pressure on nightclubs and venues — while record labels, promoters, designers and other businesses with employees, will be impacted by the increase in NIC. Freelance artists and musicians may also be impacted by the lower threshold on NIC.

There were no specific announcements concerning the arts sector in Reeves' statement, despite warnings from economists to increase arts funding across the country ahead of the Autumn Budget.

There will be tax relief for "creative industries", though this was mentioned in relation to a £25 million funding pot for VFX in TV and film.

Reeves' also announced an expansion to Creative Careers Programme, with the government pledging £3 million to support school children to learn about art careers — an increase from £1 million in 2024.

You can read the full Autumn Budget, here.

Megan Townsend is Mixmag's Deputy Editor, follow her on Twitter