Hospitality faces job cuts due to tax changes set to take effect in April. A new survey shows more than two-thirds of businesses will reduce staff. Rising costs and reduced tax relief are forcing companies to rethink their budgets.
The survey, conducted by several hospitality trade bodies, found that 70% of pubs, bars, restaurants, and hotels expect to cut jobs. Higher expenses are also causing businesses to cancel investments, with 60% saying they will halt expansion plans.
Hospitality faces job cuts due to tax changes, and industry leaders are urging the government to act. They want a delay in employer national insurance contribution (NIC) increases. Without action, they warn of economic harm, job losses, and business closures.
The government announced in October that employer NICs will rise to 15% in April. At the same time, the threshold for contributions will drop from £9,100 to £5,000. The national minimum wage will also increase to £12.21 per hour.
These measures aim to raise £25 billion annually to improve public services. However, major businesses argue that higher costs will force them to cut staff and raise prices. Hospitality leaders stress that these changes come at a difficult time.
“At a time when hospitality is driving economic growth, these cost increases threaten jobs and investment,” trade bodies warned in a joint statement. “Failing to delay NIC changes will impact businesses, communities, and supply chains.”
Many businesses are already struggling. Nearly 30% said they will cut trading hours due to rising expenses. One-quarter reported having no cash reserves left, up six percentage points from three months ago.
Hospitality faces job cuts due to tax changes, and some businesses may not survive. Around 15% of surveyed companies said they will close at least one location to stay afloat. If closures continue, communities will lose essential hubs that support local economies.
Meanwhile, separate research shows that UK wages are rising. The average advertised salary climbed to nearly £41,000 in January. Sectors such as manufacturing, retail, and logistics reported significant pay increases.
Despite concerns over job losses, employment data remains strong. The Office for National Statistics reported that unemployment stayed steady in late 2024. Wages also saw sharp growth, despite warnings from businesses about budget impacts.
Andrew Hunter, co-founder of Adzuna, noted the challenges ahead. “Competition for talent is increasing, even as hiring slows,” he said. “Jobseekers need to adapt, and employers must find ways to attract and retain staff.”
With April’s tax changes approaching, businesses continue to push for relief. Without action, hospitality leaders fear more closures, job cuts, and financial struggles.
Stay tuned to London Pulse News for more updates on how April’s tax changes will impact hospitality businesses and their fight to protect jobs.
