Hospitality hit with £3.4bn annual cost increases
UKHospitality is urging the government to urgently bring forward a plan for hospitality businesses that enables the sector to unlock growth and jobs.
Hospitality businesses will now face an additional £1.9bn in wage costs, £1bn of employer National Insurance Contributions (NICs) and £500m in business rates, as a consequence of relief being lowered from 75% to 40%.
The sector was noticeably left out of the government's spring statement, delivered by Chancellor Rachel Reeves recently. With the industry's calls for the government to rethink the changes going unheeded, the cost increases are set to take effect as of 6th April.
The cost of employing a full-time member of staff over 21 years old has risen 10% to more than £2,500 annually. The cost of employing staff aged below 18 years has increased 18%, and 16% for employees between 18 and 20 years old.
Seven in 10 hospitality businesses say they will have to reduce their employment levels as a result, risking job losses and lost income for workers. A third will reduce trading hours and 15% believe they will have to close at least one site.
Help for hospitality
UKHospitality is urging the government to urgently bring forward a plan for hospitality businesses that enables the sector to unlock growth and jobs. This should include the Treasury ensuring its business rates reform, to be unveiled in the autumn, offers the maximum discount for hospitality businesses.
Kate Nicholls, chief executive of UKHospitality, said: “The costs hitting hospitality this month are eye-watering, and the impacts it will have on businesses, teams and communities are stark. We’ve already seen a chilling effect on investment plans and job creation, all of which have been put on hold or shelved.
“Hospitality has the ability to generate socially productive growth and create jobs for everyone, everywhere, but this level of cost ties our hands behind our back. I urge the government to work with us to bring forward a plan for hospitality that addresses these issues and backs the sector to serve Britain and create places where people want to live, work and invest.”
You may also be interested in…
