More than two-thirds of businesses in the hospitality sector plan to cut staffing levels due to upcoming tax changes set to take effect in April, according to industry surveys. The research, conducted by leading industry bodies like the British Beer and Pub Association, the British Institute of Innkeeping, Hospitality Ulster, and UKHospitality, also finds that a significant majority—a full 60%—intend to cancel any planned capital investments because of the increased operational expenses.
These forthcoming changes include the increase of employer national insurance contributions (NICs) to 15% and a decrease in the threshold for these contributions to £5,000 from £9,100. Moreover, the national minimum wage is expected to rise by 6.7% to £12.21 per hour in April. Industry leaders are urging the government to delay these NIC changes, arguing that they will severely impact job creation and investment in an industry that has been pivotal in Britain’s economic recovery.
“The last thing the government should be doing is adding to our costs,” industry bodies said in a joint statement. They express concern that the tax increases may lead to significant job losses, decreased business hours, and even business closures, ultimately affecting local economies and community cohesion.
A January survey of more than 8,000 businesses across the sector shows almost a third considering reduced trading hours and a quarter lacking the cash flow to manage the increased costs. This situation is occurring even as the national average salary has climbed to nearly £41,000, reflecting the intensifying competition for staff—an issue exacerbated by the expected reduction in available job vacancies. The hospitality industry’s warning comes in the wake of official data revealing an increase in pay in the last quarter of 2024, with unemployment rates remaining unchanged, despite the associated job loss forecasts from last year’s budget.
Source: https://www.theguardian.com/business/2025/feb/24/tax-changes-force-staff-say-uk-hospitality-companies
