70% of hospitality operators to cut jobs due to tax rises

Over two-thirds of hospitality businesses plan to cut staff levels due to looming tax increases coming into force in April, a new study shows.

The survey of businesses, representing 8,300 sites between them, found 70% will reduce their employment levels while 29% plan to slash trading hours.

Some 60% of hospitality businesses polled said they would cancel planned investment due to changes to business rates and national insurance contributions (NICs) while 15% believe they will have to close at least one site.

The survey by the British Beer and Pub Association, the British Institute of Innkeeping, Hospitality Ulster and UKHospitality also found 25% have no cash reserves left, up 6% since October 2024.

In a joint statement, the trade bodies warned there would be a “significant” impact on jobs, communities and supply chains if the tax rises went ahead as planned.

The trade bodies are jointly calling for the government to delay changes to the employer NICs threshold to avoid an immediate impact on the hospitality sector.

In a joint statement, the trade bodies said: “These figures should serve as a clear warning that pubs, brewers and hospitality venues will be forced to make painful decisions to weather these new costs, which will have damaging impacts on businesses, jobs and communities.

“At a time when hospitality has been one of the top contributors to economic growth, the last thing the government should be doing is piling on costs that will impact employment and cut off our ability to grow.

“We want to work with government so we can continue to vitally boost the economy, which is why we urge them to delay the changes to the employer NICs threshold. This would help save jobs and allow the sector to continue on its growth path.”

The Budget has sparked warnings over jobs and growth from all sectors of hospitality. Bar group the Revel Collective said it would cost the business as much as £4m, pub chain Young’s said the NIC rise will add £11m to its costs, while hotel group Malmaison and Hotel du Vin warned it will add £1.5m to its payroll.

Scottish chef Dean Banks told The Caterer he had scrapped plans to open a 200-seat food hall in Dundee that would have employed 30-40 people, after tax changes meant it became essentially unaffordable.

The trade bodies said: “Our message to government is to delay its changes to the employer NICs threshold and allow hospitality to continue to deliver economic growth, regenerate our high streets and support local communities.”