Third of hospitality venues making loss after tax rises – Daily Business

A third of hospitality venues are losing money and could go out of business following the government’s recent tax rises, according to the industry.

A poll for some of the sector’s biggest trade groups reveals the level of risk facing pubs, hotels and restaurants following the £3.4 billion in additional costs imposed by Chancellor Rachel Reeves from April.

UKHospitality, the British Beer & Pub Association and the British Institute of Innkeeping are among those who say their members have been hit hard by changes to employer national insurance contributions (NICs) alongside hikes in business rates.

Six in ten operators said they had already been forced to cut jobs and nearly two-thirds have reduced staff hours. More than half have cancelled investment plans and 76% have increased prices in an attempt to stay afloat.

They say the tax rises threaten the future of a sector that supports close to a million jobs and adds £26.2 billion to the UK economy each year.

In a joint statement, the trade bodies said: “Hospitality is vital to the UK economy but is under threat from ongoing cost rises, which the April increases have only exacerbated.

“Jobs are being lost, livelihoods under threat, communities are set to lose precious assets and consumers are experiencing price rises when wallets are already feeling the pinch.

“The overall tax burden on our sector must be reduced, including consideration of the long-standing ask of a VAT cut for the sector, so the hospitality industry can return to investment, job creation and growth in communities the length and breadth of the country.”

A Treasury spokesman said: “We are a pro-business government and we know the vital importance of the hospitality sector to local communities and the wider economy, which is why we are supporting them with business rates relief, cutting duty on draught pints, capping corporation tax and are protecting the smallest businesses from the employer national insurance rise, which is helping to fund the NHS.”