"Since the October 2024 Budget, hospitality operators have been hit by a £3.4 billion cost shock, fuelled by increases in employer NICs, reduced thresholds, National Living Wage rises, and the scaling back of business rates relief. As a result, the sector has faced several challenges, including 84,000 job losses - a sharper decline than seen in the wider economy. Representing one of the UK's most productive sectors, hospitality employs 3.5 million people, contributes £140 billion a year and generates £54 million in annual tax receipts."
"Despite hospitality being the backbone of local employment and communities, recent fiscal policies are penalising the workforce that sustains it. The current national insurance contribution (NICs) thresholds drag 774,000 workers into a punitive tax bracket. We recommend introducing a lower NICs band (£5,000-£9,100) at a 5% rate, or providing exemptions for young people and those transitioning from welfare to work."
Hospitality has absorbed a £3.4 billion cost shock driven by higher employer NICs, lowered thresholds, National Living Wage increases, and reduced business rates relief. The sector has lost 84,000 jobs and shows steeper employment decline than the wider economy. Hospitality employs 3.5 million people, contributes £140 billion annually and generates £54 million in tax receipts. One in three hospitality businesses operate at a loss and pay high tax burdens, with 75% of pre-tax profits effectively taxed. Recommended interventions include a lower NICs band at 5% (or targeted exemptions) and permanent business rates reform with a lower multiplier to prevent closures.
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]