A joint survey by hospitality trade bodies including UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster, carried out by CGA by NIQ, has revealed how the sector fears it will be drastically affected by new employment costs and the reduction in business rates relief come April.
Some 70% of businesses say they will have to reduce their employment levels, risking job losses and lost income for workers, while 60% will be forced to cancel planned investment.
Additionally, 29% expect to reduce trading hours, with 15% believing they will have to close at least one site.
The rise in NICs will see the threshold that businesses start paying National Insurance on a workers’ earnings lowered from £9,100 to £5,000 and the level of contribution rise from 13.8% to 15% from April.
At the same time, business rates relief for the sector will be cut from 75% to 40%, capped at £110,000.
In a joint statement, the trade bodies said: “These figures should serve as a clear warning that pubs, brewers and hospitality venues will be forced to make painful decisions to weather these new costs, which will have damaging impacts on businesses, jobs and communities.
“At a time when hospitality has been one of the top contributors to economic growth, the last thing the Government should be doing is piling on costs that will impact employment and cut off our ability to grow.
“We want to work with Government so we can continue to vitally boost the economy, which is why we urge them to delay the changes to the employer NICs threshold. This would help save jobs and allow the sector to continue on its growth path.
“If it doesn’t act then businesses are clear that the impact on communities, employees and supply chains will be significant.
“They have warned about potential lost earnings, lost jobs, reduced trading hours and, in some cases, business failure. This would mean the loss of essential community hubs that would otherwise drive the local economy and create jobs.
“Our message to Government is to delay its changes to the employer NICs threshold and allow hospitality to continue to deliver economic growth, regenerate our high streets and support local communities.”
UKHospitality has previously suggested measures that it said could help mitigate the impact of the NICs rise.
They include creating a new employer NICs band from £5,000 to £9,100 with a lower rate of 5%; and implementing an exemption for lower band taxpayers working fewer than 20 hours per week.
Operators representing a total of 8,300 sites responded to the joint survey, which was carried out in January.
