Hospitality sector leads calls for tax cuts

Industry leaders have warned that the hospitality sector is under increasing pressure, with 79% of pubs, restaurants, and bars raising prices due to increased operating costs.

A survey by trade bodies including UKHospitality, the British Institute of Innkeeping and the British Beer & Pub Association shows that 73% of operators have less than six months of cash reserves, while more than half of the firms polled have reduced staff to manage finances. The sector has seen costs climb amid increases in the national minimum wage and National Insurance contributions, while reduced business rates discounts have added to the challenging climate.

Despite a strong summer of trading, cost increases have forced almost three-quarters of businesses to operate at or below 85% of required capacity.

The stark results from members of the British Institute of Innkeeping (BII), the British Beer & Pub Association (BBPA), UKHospitality and Hospitality Ulster come as 84,000 hospitality jobs have been lost since the Budget, which imposed an additional annual cost of £3.4 billion on the sector.

The trade bodies have urged the Government to implement tax relief measures to support struggling businesses.

The hospitality sector has outlined three measures that they believe are important to drive growth: a reduction in VAT, amend April’s changes to employer NICs and delivery of lower business rates.

Saxon Moseley, Partner at RSM UK, said “Taking steps to overhaul the business rates system, plus supporting the industry to respond to recent tax increases would allow operators to not only weather the storm, but invest in jobs for the future.”