EventWS Hospitality Summit, London, Thursday 19 November 2026, Daffodil Mulligan.RSVP for one of 50 places
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WS Hospitality Edition · Autumn Budget 2026
Hospitality Budget Planning Guide 2027
Twelve months ago we helped build 2026 budgets. Here we mark our own homework, answer the questions operators sent us about the Budget, and set out a 2027 budget framework you can hand your GM tomorrow morning.
Start with credibility. The misses matter more than the hits: we called energy flat and a recession, and the opposite happened. The lesson is not to forecast better. It is to build a budget that survives being wrong: scenarios, buffers and a weekly rhythm that spots the miss in week two, not month six.
Hit
Half right
Missed
Half rightWage inflation 5%+NLW +4.1% to £12.71; 18-20s +8.5%
MissedEnergy flatliningWar: diesel +41%, gas futures +166%
HitRevaluation shifts billsRateable values up 19.4% in England
HitNo change to VATStill 20%, despite a 400,000 petition
HitNo further employer NI riseHeld at 15% on a £5,000 threshold
MissedRecession by JulyUK joint-fastest growth in the G7
HitWar likely, lock in contractsThe Iran conflict drove the energy shock
Not yetTronc rules tightenNothing material has landed yet
02 · Budget day in one page
What the Budget delivered, line by line
Not deliveredHospitality VAT at 10%No cut. Still 20% on every meal out
ConfirmedPubs and live music reliefRises from 15% to 35% from April 2027
ConfirmedSmall business rates relief100% to £18,000 RV, tapering to £21,000; c.70,000 out of rates
ConfirmedHospitality rates billsCapped at CPI for 2027/28 and 2028/29
ConfirmedNational Living Wage£12.71 to £13.21 (+3.9%); 18-20s £10.85 to £11.27
No changeEmployer NI15% rate, £5,000 threshold, £10,500 allowance
ConfirmedAlcohol dutyUp with RPI from 1 February 2027; no freeze
ConfirmedOvernight visitor levyPower for all Strategic Authorities in England
ConfirmedProperty and savings incomeTax rates +2 points from April 2027
Did we get 10% VAT, and is VAT the biggest problem?
No 10% VAT. It is still the biggest lever in pounds
20%still the VAT rate on a meal out
Annual value to the WS model restaurant (£1.5m sales, 45 staff)
VAT cut to 10%, prices held£136.4k
Employer NI threshold to £10k£27.8k
Extra 20 points of rates relief, pubs only£5.2k
NI on a £480k payroll over 45 staff after the employment allowance; rates on £60k rateable value at 43p.
Our takeIn pounds, VAT is the biggest problem: a 10% rate with prices held is worth about £136k a year to our model restaurant, roughly 9% of sales. It did not come. The biggest lever any operator controls is price, menu mix and rota. Do not wait for the Chancellor to fix a P&L you can fix on Monday.
Q02
Will rates cuts extend to restaurants?
Not as it stands. The relief stops at the pub door
Wins
Pubs, clubs, live music
35%
relief from April 2027
c.32,000 venues qualify
Typical pub saves c.£1,100 a year
Up from 15% in 2026/27
Still pays more
Restaurants, cafes, hotels
≤3.5%
bill rise, capped at CPI
Lower hospitality multipliers since April 2026
Cap holds for 2027/28 and 2028/29
1p supplement extended two years
Wins
Small sites
£18k
rateable value, full relief
Tapering to nil at £21,000
c.70,000 more businesses out of rates
One property only, so not for groups
Our takePull your rateable value from the VOA this week and check whether you sit near £51,000 or £500,000, the multiplier cliffs. Then run your estate through our business rates calculator: most mixed estates see the total fall while most sites go up.
Q03
Are NI and wages locked in?
Treat them as the floor, not a spike
National Living Wage, £ an hour, each April
+48% in six years. It now tracks two-thirds of median earnings.
15%Employer NI rateUnchanged at the Budget
£5,000Secondary thresholdFrozen
£10,500Employment allowanceUnchanged at the Budget
Plan labour on sales per labour hour, not on cheaper hours.
Our takeAsk your GMs what an hour of labour needs to generate at £13.21 plus NI plus holiday pay. For most sites it is north of £45 in sales. Around 330,000 hospitality jobs sit at or near the minimum, so this moves every April.
Q04
How much more to open the doors?
About £141 more every day, before the first cover
Annual cost increase, WS model restaurant (£1.5m sales)
£141extra cost per trading day from April 2027
34%of a 10% EBITDA gone if you do nothing
Assumptions: NLW +3.9% on £360k, other pay +3% on £120k, food and drink +4% on £420k, energy +20% on £45k at renewal, non-food +5% on £90k, rates +3.5% on £60k rateable value.
Our takeDo this sum for your own site this week: seven lines on a page. If it takes more than ten minutes, your numbers are not close enough to the operation.
Q05
What does the Budget do to a pub?
For a pub, the rates relief covers 6% of the wage rise
Budget 2026, the billA pub taking £25,000 a week
Wages, NI, pension, holiday pay+£22,460
Alcohol duty+£2,023
Business rates relief−£1,460
Extra a year£23,023
Where it comes from
Wages and on-costs+£22,460
Alcohol duty+£2,023
Business rates−£1,460
To stand still: prices up 1.77%, or 22 more covers a week, or 25 fewer rota hours.
Food inflation looks calm. The pipeline says otherwise
1.3%Food inflation, September
+11.4%Fish, year on year
+41%Diesel since February
+166%Gas futures, December
Energy and fuel spikeFeb to Oct 2026
Suppliers absorb, then pass onA 6 to 9 month lag
Lands on your invoicesThrough 2027
Our takeFix prices with key suppliers before Christmas, cut delivery drops, and re-tender any non-food contract over £10k. Budget non-food at +4% to +6%.
Q07
Can guests still afford to eat out?
Yes, but they will spend it more carefully
-24GfK confidence, down 11 points in October
3.5%CPI inflation, heading above 4% early 2027
3.75%Bank Rate, a rise to 4% expected 5 November
2031Tax thresholds frozen until
The good news
Pay growth of 3.9% is ahead of inflation, for now
The NLW rise funds your youngest guests too
UK growth led the G7 in the first half
What it means for you
Fewer occasions, each judged harder
Value is the battleground, not discounting
Midweek and lunch soften first: watch weekly
Q08
How is the £12bn filled?
Locked rates, so the money came from stealth, not headlines
Headroom against the fiscal rules, before the Budget
£24bnMarch 2026
£12bnOctober 2026
Locked by the manifesto: income tax, NI and VAT rates. So the money came from here (£bn a year)
Savings and property income tax +2 points£1.1bn
Bank surcharge 3% to 6%, for 15 months£0.95bn
Company distributions rules£0.8bn
HM Treasury Budget 2026 policy costings: income tax 2028-29, bank surcharge 2027-28, distributions 2029-30. Headroom: Resolution Foundation.
Our takeIf you own your premises personally and rent them to your company, that rent is taxed more from April 2027. Hold any profit extraction planning until the distributions detail is published.
Q09
Government or us?
Government sets the weather. Operators choose the clothes
The weather: government
c.100khospitality jobs lost in two years
45%of all UK job losses were hospitality
£5bn+of extra cost in two years
82%of pre-tax profit paid in business taxes
295pubs shut in nine months of 2026
The clothes: us
Rent over 10% of sales
Concepts that stopped evolving
Prices changed late and small
Rotas built on habit, not demand
Numbers seen monthly, too late
No cash runway past payroll
Our takeTax explains why the margin for error vanished. It does not explain why one site thrives and the one next door shuts. Own the right-hand side: you can change it on Monday.
Q10
Where is the hope?
Some delivery. The biggest promise is still open
Delivered 5
Lower hospitality multipliers, permanent
Pubs: 15% relief, then 35%
Caps on revaluation rises
Small business relief to £18k
Growth at the top of the G7
Still open 5
Hospitality VAT at 10%
Employer NI relief
Rates help for restaurants
Wider rates reform
A tronc settlement
New headwinds 5
Overnight visitor levy
Energy shock
Rates bills up with CPI
Likely Bank Rate rise
Alcohol duty up with RPI
Our takeHope is not a plan. Build a business that works at 20% VAT, so a cut becomes profit, not survival.
Q11
The one thing to decide?
Decide your April 2027 price and labour plan before Christmas
One considered price rise, landed with the April wage rise. Every dish re-costed, every rota rebuilt. Not three small rises chasing costs.
NovRe-cost your top 20 dishes
DecSet the April price list
JanRebuild rotas at £13.21
FebFix energy and supplier prices; duty rises on the 1st
MarBrief teams and guests
1 AprPrice and wage rise land together
WatchLabour % weeklyActual against plan every Monday, by site. Correct mid-week.
WatchYour energy contract dateKnow the renewal date and target price. Never roll onto variable.
Watch13-week cashJanuary to March brings VAT, quarter-day rent and quiet trade at once.
Live · Run the numbers
Try it with your own figures
The same tools we use in the room. Move the sliders: nothing you enter leaves this page.
The clock is running
Until the National Living Wage hits £13.21
-days
-hours
-minutes
-seconds
-days to the WS Hospitality Summit, 19 November
-days to the alcohol duty rise, 1 February
-weekly payrolls left to get ready
The headline against the cost
Put the relief on the scales
Net £23,023 a year against a pub taking £25,000 a week. The relief covers 6% of the wage rise.
Live calculator
Your venue, from April 2027
Extra cost a year
£0
Wages and on-costs-
Alcohol duty-
Business rates-
-a day
-of profit
-price rise to stand still
Close the gap
Three levers. Mix them until the ring is full
0%of the gap closed
Gap to close: £23,023 a year (the typical pub; set yours on the calculator slide)
Price£0
Rota£0
Covers£0
Covers at £28 a head and 72% GP; rota hours at the new National Living Wage with holiday, NI and pension.
04 · The practical
Building a 2027 budget that actually works
Our planning assumptions, deliberately cautious. Build your base budget on them, then run a downside with sales 3% lower and see what breaks. If your budget does not show April as its own month with its own plan, it is not finished.
4.25%Bank Rate to stress your covenants against
Change to plan for in 2027
Hourly pay+3.9%
Payroll incl. NI+4.5 to +5%
Food cost+4 to +5%
Drinks, before duty+3 to +4%
Energy, on renewal+15 to +25%
Business rates+3.5%
Spend per head+3 to +4%
Covers0 to -2%
-5%0%+5%+10%+15%+20%+25%
Drinks before duty; duty rises with RPI on 1 February. Pubs get 35% rates relief: check your rateable value.
05 · Crystal ball
Ten calls for 2027, to mark next October
We marked last year's calls in public. Copy the habit: write your assumptions down, then check them. It is the fastest way to get better at running a P&L.
01VAT becomes when, not ifBudget without it; a cut is upsideMarked Oct 2027
02Energy is the new wage shockContract dates become a board itemMarked Oct 2027
03Rates split the sectorPubs gain, restaurants and hotels payMarked Oct 2027
04Price rises move to AprilOne well-told rise beats three quiet onesMarked Oct 2027
05Smaller, better-paid teamsSales per labour hour is the KPIMarked Oct 2027
06Menus shrink, specs tightenFewer lines, more margin per plateMarked Oct 2027
07Distressed M&A picks upKeep opportunity capital readyMarked Oct 2027
08Visitor levies reach big citiesHotels and short stays feel it firstMarked Oct 2027
09Lenders want weekly dataAnnual accounts will not be enoughMarked Oct 2027
10AI moves to the back officeRotas, forecasts and invoices firstMarked Oct 2027
Over to you
Four questions for your next leadership meeting
What worked, and what flopped, in your 2026 budget?
What is your April 2027 price decision?
Where are you most exposed: labour, energy or demand?
What would you do with 10% VAT tomorrow?
Budgeting is a weekly discipline, not an annual task. The best budgets get torn up and rebuilt. WS clients who review weekly outperform those who do not.
