Hotel owner plans to scrap £20m investment plans following budget 

The owner of two Derbyshire hotels said he planned to scrap £20m of investment following last month’s budget.

 

Steve Perez is the owner of the Casa Hotel, the Peak Edge Hotel and the Red Lion pub in Chesterfield, as well as drinks company Global Brands and a 360-acre farm that supplies his hospitality businesses.

 

He told The Telegraph he had called time on plans to add a spa and 27 bedrooms to his Peak Edge hotel and a canning system at its drinks business, following chancellor Rachel Reeves’ changes to inheritance tax.

 

He told the newspaper: “I have absolutely stopped it. I’d be crazy to invest all that money because I’m just going to give my family a big headache in the future.”

 

Business properties had previously been exempt from inheritance tax when passed to descendants.

 

But, under new rules those valued at more than £1m will be subject to 20% inheritance tax.

 

Perez said the new rules would ultimately mean “insecurity for the working person in my business”.

 

He added that his decision to halt the investments would also mean dozens of new jobs would not be created.

 

Perez bought the site of Casa Hotel in 2006 and opened the property in November 2010. He bought the Red Lion and Peak Edge Hotel, which were previously owned by his father, in 2017.

 

Other hospitality operators have spoken of the impact October’s budget will have on investment, growth and jobs in the industry.

 

The board members of UKHospitality, as well as a further 209 hospitality businesses, signed a letter to Reeves detailing the consequences of the increase in employer taxation.

 

The government is to increase the rate of employer Class 1 National Insurance contribution rates (NICs) from 13.8% to 15%.

 

It is also reducing the per-employee threshold at which employers become liable to pay National Insurance from £9,100 to £5,000 a year, from 6 April 2025.

 

Analysis by UKHospitality revealed the increases to employers’ NICs and wages will hit hospitality harder than other industries, with a 10% rise in the cost of employing a worker, amounting to at least £2,500 per employee.

 

In a letter to the chancellor, the bosses of Fuller’s, Stonegate Group and Whitbread, among others, said: “There is no capacity to pass the costs onto customers. Businesses would be reluctantly forced to raise prices by 6-8%, fueling inflation, yet could not realistically do so as our customers are at the end of their ability to pay more.

 

“We understand that these proposals come at an immediate financial cost, but we are absolutely firm in our belief that the lost growth potential which would result from inaction would be substantially more expensive, for the economy, for society and for the public finances.”