Hospitality entrepreneur warns tax demands threaten sector’s recovery

The owner of a Warwickshire country house hotel and golf club has come out swinging days after some hospitality venues reopened, demanding Government and his local council make big changes to their tax demands.

Rick Cressman, who has owned the seventeenth-century Nailcote Hall outside Coventry for 30 years, has become frustrated by the approach of authorities wanting large tax payments just days after venues are expected to be able to operate at capacity for the first time in June.

“They’re making it incredibly difficult for businesses that have been shut for so long to recover, when they ought to be making it possible,” he said.

“Rishi Sunak himself promised everyone opportunity and hope. I think at the moment he’s actually taking away the opportunity and hope with the actions he’s taking.”

Hospitality businesses such as Nailcote Hall will have been effectively closed for 15 months by the time restrictions are eased sufficiently to hold large events. There is then the unknown factor of consumer appetite to return immediately once they are allowed to do so.

Rick Cressman

But there is lots of appetite for the authorities to claw back deferred payments and restart collections.

“The Chancellor is trying to get blood out of stones,” said Cressman. “He is going to cause lots of businesses throughout the hospitality sector and high street to have a tremendous amount of cash flow problems.

“The net result is going to be instead of actually helping us to get back on our feet and recover, they’re actually going to crash a lot of businesses into trouble, lose a lot of jobs and prevent a lot of re-employment by pulling the rug out from under us.”

Cressman expects his £2.8m-turnover business will achieve just 5% of normal revenues in April, 20% in May and up to 50% in June.

There is optimism that the hospitality and leisure business can recover and rebound over the medium and long-term.

He said: “I think our prospects as a business are quite good. In terms of volume of business, I think we can get back on our feet. I think we can hopefully start recruiting some staff back into the business as long as we’re not dredged of cash.”

The current roadmap for reopening means large gatherings, such as weddings and parties, can only take place from late June at the earliest.

But deferred VAT and NI payments to HMRC of £12,500 a month are due to begin in July alongside £3,000 a month to Solihull Council for business rates, even after the substantial discount that has been introduced.

“My feeling is that we certainly can’t repay it over eight months, that’s just ridiculous,” he said. “We need more like 24 months.

“Because if we don’t, we’re going to find ourselves in a position where we could just not have enough cash coming through the door to be able to achieve it.”