What impact could the UK Budget 2025 have on nightlife?
With a new tax on ride-sharing services like Uber and wage increases expected to cost the hospitality industry around £1.4 billion a year, the new budget could have a big impact on UK nightlife
Rachel Reeves, The Chancellor of the Exchequer, unveiled the UK government's 2025 Budget yesterday (November 26), which included a host of tax changes, public spending commitments, and more.
Ahead of the budget, there were fears from nightlife bodies such as the Music Venue Trust and the Nightlife Industries Association (NTIA), that Business Rate Multipliers will heavily impact businesses with properties worth over £500k, while assets above £51k will also see significant changes in tax rates.
This was confirmed as part of Reeves' budget, though the UK government has also committed to a £4.3 billion support package for industries such as nightlife still recovering from the COVID-19 pandemic, including a "Small Business Scheme" for grassroots businesses worth over £500k.
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Despite this, NTIA CEO Michael Kill referred to the budget as a "hammer blow" to the "already fragile" nightlife industry. "With inflation now higher than it's been for some months and the cost of living becoming increasingly unsustainable, disposable income has all but disappeared, swallowed up by rising everyday costs."
“We are deeply concerned by the scale of direct and indirect tax increases set to hit our sector over the coming months,” he says. “Many venues are already operating on the edge, and we will inevitably see businesses handing back their keys by January, when VAT, quarterly rent payments, and other financial obligations collide.”
Kill also cites the 4.1% increase in the National Minimum Wage to £12.71 an hour, and the 8.5% rise for 18 to 20-year-olds, claiming that, while a rise in wages “sounds positive,” it will put further pressure on nightlife businesses employing young people.
“Without meaningful support for businesses, this risks devastating consequences for staffing, long-term sustainability, and job opportunities in the very communities the government claims to champion,” he continues.
The increase in wages is predicted to cost the hospitality industry around £1.4 billion a year, however, with young people and minimum wage earners having more disposable income, this could result in increased spending in pubs, nightclubs, and music venues.
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The UK government has also announced its intention to implement a “ride-sharing” tax, which will see a 20% VAT on journeys booked through apps such as Uber and Bolt. This new tax will impact the cost of getting home from a night out in London and other areas where ride-sharing apps charge customers directly.
In a statement to The Standard, a spokesperson for Uber said: “The government’s action today to change the rules will mean higher prices for passengers in London, and less work for drivers, when people are already struggling with the cost of living."
“The courts have twice ruled that the Tour Operators’ Margin Scheme applied to operators like Uber," the statement continues. "This decision also establishes the absurd situation where a trip in London will be taxed at a different rate than a trip anywhere else in the UK.”
You can read the full UK government's Budget 2025 here.
Megan Townsend is Mixmag's Deputy Editor, follow her on Twitter
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