A third of the UK’s pubs, bars, restaurants and hotels are now operating at a loss following a wave of government-imposed tax increases that came into effect in April, according to a new industry survey.
The research, conducted by UKHospitality, the British Beer & Pub Association, the British Institute of Innkeeping and Hospitality Ulster, reveals that nearly one in three hospitality firms is losing money—raising concerns about the future viability of a sector that contributes over £26 billion to the UK economy and supports close to a million jobs.
The stark findings come after a series of fiscal changes introduced in the Chancellor’s spring budget. Most notably, employer National Insurance contributions (NICs) were raised from 13.8 per cent to 15 per cent, while the earnings threshold triggering NIC payments was reduced from £9,100 to £5,000. Business rates also rose for many premises, adding further financial strain.
According to the survey, which polled hundreds of businesses last month, 60 per cent of hospitality operators have already cut jobs and nearly two-thirds have slashed staff hours. More than half said they have been forced to cancel planned investments, and 76 per cent have increased prices in an attempt to remain solvent.
The total cost impact of these changes is estimated at £3.4 billion across the sector. Industry leaders warn that the sudden hike represents the sharpest quarterly increase in operating costs in years—and risks accelerating the closure of local pubs, hotels and restaurants that are still recovering from the pandemic and grappling with broader inflationary pressures.
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