Hospitality Call to Arms!

[jackwhite]

8 minutes ago, Anthony Ingham said:

Drop your prices and maintain the same margin and you might get more business and so more profit.

Why should hospitality get a government funded boost to their margin when nobody else is?

So a business that's already struggling should drop their prices, and they'll still get the same margin and make more profit?

Again, it's not help for hospitality only, it's for everyone that's subject to VAT and wage struggles. Should I repeat it.....it's not for hospitality only. 

Edited April 24 by jackwhite

[Anthony Ingham]

5 minutes ago, jackwhite said:

So a business that's already struggling should drop their prices, and they'll still get the same margin and make more profit?

Yes

I take it you do understand what VAT is and how it works?

[jackwhite]

11 minutes ago, Anthony Ingham said:

Yes

I take it you do understand what VAT is and how it works?

Yes, I understand what it is and how it works. 

However you're still giving away the VAT, regardless. So if you buy something and normally price it at 50% margin, you're not going to maintain a 50% margin, after VAT, by reducing it!

[Non-Believer]

And this is why you won't see it happening. Loss of revenue to Treasury which would have to be made up from elsewhere (given the lack of enthusiasm for cutting Govt costs) and impact on the 28% of the Island's income that it gets from the FERSA/VAT arrangement.

Edited April 25 by Non-Believer
Typo

[NoTailT]

I’m not reading this entire thread but aware of the calls to arm and subsequent statements.

Frankly, this industry got so much money from Gov coffers during the pandemic and they continue to think they’re somehow special.

Andy at Quids Inn moaning is quite stupid when he thrives his business on offering the cheapest drinks on the Island. £2 per measure of spirit isn’t exactly sustainable these days. Nor are £2.20 pints of beer.

I’ve eaten out quite a bit recently, at venues I deem to be good/nice, they’ve always been busy even on random midweek evenings.

but when places on the Island think they can charge £40 for a fillet steak on its own and I can cook it better at home than they can, they can’t blame the customer for their lack of custom.

Pay issues are a much wider issue for the economy. But the prospect of giving hospitality more support when they’re just too lazy to adapt is absurd.

Edited April 25 by NoTailT

[Anthony Ingham]

8 hours ago, jackwhite said:

Yes, I understand what it is and how it works. 

However you're still giving away the VAT, regardless. So if you buy something and normally price it at 50% margin, you're not going to maintain a 50% margin, after VAT, by reducing it!

What?

if I buy something for £10 and retail it for £20 ex VAT at 20 percent, I sell it to the public for £24 and make £10 margin.

If I sell it for £20 plus 5% VAT that’s £21 with the exact same £10 margin.

By passing that saving on to the customer I don’t impact my margin but might see more customers through the door which might result in more profit.

Obviously that doesn’t take into account the initial costs associated with altering POS, accounting systems etc and any complications arising from being VAT registered and buy services with 20 percent but only collecting 5.

[Andy Onchan]

5 hours ago, Non-Believer said:

And this is why you won't see it happening. Loss of revenue to Treasury which would have to be made up from elsewhere (given the lack of enthusiasm for cutting Govt costs) and impact on the 28% of the Island's income that it gets from the FERSA/VAT arrangement.

But this was an interesting comment:

Is IOMG really looking to abrogate the Common Purse Agreement?

 

 

 

 

 

 

 

Edited April 25 by Andy Onchan

[Ringy Rose]

9 hours ago, A fool and his money..... said:

There's obviously not too many tough choices in your life, If your income tax has gone up £40 a month.

I didn’t say I was on the bones of my arse, I said I didn’t want to be paying more income tax to prop up failing businesses.

[Passing Time]

1 hour ago, NoTailT said:

I’m not reading this entire thread but aware of the calls to arm and subsequent statements.

Frankly, this industry got so much money from Gov coffers during the pandemic and they continue to think they’re somehow special.

Andy at Quids Inn moaning is quite stupid when he thrives his business on offering the cheapest drinks on the Island. £2 per measure of spirit isn’t exactly sustainable these days. Nor are £2.20 pints of beer.

I’ve eaten out quite a bit recently, at venues I deem to be good/nice, they’ve always been busy even on random midweek evenings.

but when places on the Island think they can charge £40 for a fillet steak on its own and I can cook it better at home than they can, they can’t blame the customer for their lack of custom.

Pay issues are a much wider issue for the economy. But the prospect of giving hospitality more support when they’re just too lazy to adapt is absurd.

Shows just how blinkered you are. Hospitality got just enough to ensure they barely survived. You are confusing hospitality with the accommodation business. Hospitality had to prove with every "handout" what they would have taken in the same period 12 months prior. all accommodation had to do was submit the number of rooms. 

[NoTailT]

1 hour ago, Passing Time said:

Shows just how blinkered you are. Hospitality got just enough to ensure they barely survived. You are confusing hospitality with the accommodation business. Hospitality had to prove with every "handout" what they would have taken in the same period 12 months prior. all accommodation had to do was submit the number of rooms. 

Remind me: who subsidised the voucher scheme to boost spending at hospitality businesses?

Remind me: who enjoyed a reduced VAT rate for a period of time https://covid19.gov.im/news-releases-statements/vat-reduction-on-food-and-attractions-to-stimulate-business/

They got a lot more support than most of other sectors. Yes, accommodation got a lot more, we know that.

I absolutely understand frustration - not just in hospitality - about changes to incomes of those earning the lower amounts.

But this woe to me about how they are struggling when they refuse to adapt their businesses - like everyone else has - really isn't something I or Government should care for.

Like ever business you have to understand your costs and that being a revenue collector for the Government is part of your business. My steak example was a good one. I can get a good sized Finest Tesco Fillet for £8.50 or one from the butchers for a bit more. Why would I go out to pay £40 for it and more often than not I can cook it better myself at home?

What hospitality needs to do is adapt and be creative. But I really find there is little variety between most eating venues on the Island, the usual; Steaks, Queenies, Burgers and some Pasta. With little creativity in the dishes.

When peoples wallets are being pressed, drinking out starts to become a no-go, more so than deciding to eat out. It's always been like this, for a many many years. Like I said, Quids Inn? They could add £1 to every alcoholic drink and still be as popular and rammed as they ever are or have been.

Brewery pubs are brewery pubs. I don't think many of them are really 'boozers' these days. They're all very focussed on the food and it isn't usually great. I ate at The George in Castletown recently and they had a great South African menu which I really enjoyed and it brought a new style of food to try.

I am not blinkered. But this typical Isle of Man attitude of "Government must do more to help us" has to stop.

Edited April 25 by NoTailT

[Fred the shred]

As for the abrogation part we were nearly there a long time ago when a local manufacturer who employed a lot of people threatened to close down if we did and the Government decided not to, there were obviously other factors involved in that decision.    Whether the right decision was made who knows , I think this was in the 70s but stand to be corrected.

[WTF]

14 hours ago, jackwhite said:

Firstly, Manx Care has had 350 new nurses in the not too distant past, according to Cannan tonight. Could they be doing with more? Probably. 

ah yes , but did he say how many nurses actually left in the last 4 years?  some that wouldn't be vaccinated got binned during covid . then we have some that have retired and some to take up positions as bank nurses/staff so if they didn't feel like working they didn't have to , effectively putting themselves on zero hour contracts with an increase in their hourly rate as i understand it ??.   do not be fooled into thinking 350 new nurses means there are 350 extra/more  nurses/positions at the hospital , that is not the case, , lots will be filling the holes that those leaving made.

Edited April 25 by WTF

[NoTailT]

2 minutes ago, WTF said:

ah yes , but  he say how many nurses actually left in the last 4 years?  some that wouldn't be vaccinated got binned during covid , some to retire, and some to take up positions as bank nurses/staff so if they didn't feel like working they didn't have to , effectively putting themselves on zero hour contracts with an increase in their hourly rate as i understand.   do not be fooled into thinking 350 new nurses means there are 350 extra/more  nurses/positions at the hospital , that is not the case, , lots will be filling the holes that those leaving made.

A family friend is a bank nurse. She was once full time at Nobles.

She gets probably half a dozen requests to fill empty slots by SMS every day.

There certainly isn't enough of them.

[Non-Believer]

4 hours ago, Andy Onchan said:

But this was an interesting comment:

Is IOMG really looking to abrogate the Common Purse Agreement?

Scary thought for a number of reasons and who would actually be doing the driving of it? That's a quote from an IoMG-produced document so there might be any amount of spin, "withdrawing" might mean that a cash-strapped UK Gov have decided things as they are must end?

And how many more would we need to employ to administer some sort of GST replacement? 😱

[code99]

Personally, I am gutted about The Tea Junction closing because it is one of my favourite places to go for a bit of niceness. When listening to the owner being interviewed on ITV, I was genuinely disappointed to hear that they are not making enough money to stay in business. I would have thought they could try to raise prices, as most of their clientele seem to be well-off and might be able to afford price increases. So, what can be done?

I have a plan. As a taxpayer, I want MHKs, MLCs and all non-frontline service CS/PS desk jockeys earning north of £70k pa to eat out for a minimum 6 nights a week (or alternatively, with special permission, they can substitute breakfasts and lunches for evening meals). I know that that suggestion might sound a bit dictatorial, but Cannan seems to like a bit of totalitarianism (not so much criticism) and those dictatorial tendencies could come to our hospitality industry’s rescue... These people are among the most highly paid residents, and if they can’t help local economy, who can? By dining out and not sitting at home and counting their endless pennies (their incomes have been gifted to them by taxpayers) they can give something back to the community, i.e., it is only fair that these better-off establishment residents give a little bit back. I reckon this idea would be an easier option for Treasury than lowering the VAT rate.

ETA: Try to think of this idea as ‘taxes with benefits.’

Edited April 25 by code99