A coalition of 345 leading hospitality businesses across the UK has called on the government to implement urgent support measures at the forthcoming Budget, citing mounting tax burdens and job losses in the sector.
The open letter, coordinated by trade body UKHospitality, urges the Chancellor to lower business rates, fix national insurance costs and cut VAT to safeguard the high street and the wider hospitality industry.
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Rising pressures on hospitality from tax and cost burdens
The signatories—spanning hotels, pubs, restaurants, leisure parks and visitor attractions—warn that the sector has been “taxed out”.
The letter states that more than 80,000 jobs have been lost and almost six in ten hospitality businesses are pessimistic about their prospects in the coming year. It describes the effects as “immediate, concentrated and socially regressive”.
The campaign builds on UKHospitality’s findings that one third of hospitality businesses are now operating at a loss following cost rises and tax changes. Three policy demands for the budget.
The letter outlines three specific measures:
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By GlobalData- Lowering business rates: for venues under £500,000 rateable value and removing penalty charges for larger hospitality sites.
- Fixing employer national insurance contributions (NICs): targeted support for employers hiring young people and those returning to work.
- Cutting VAT on the hospitality sector: to spur investment, reduce consumer prices and enhance competitiveness with European peers. The UK still charges 20% VAT in hospitality, compared with mid-teens levels elsewhere in Europe. UKHospitality+1
Implications for high street, jobs and investment
According to UKHospitality, the hospitality industry contributes £140 billion in economic activity and employs around 3.5 million people across the UK.
The high tax burden it faces—claimed to be the highest of any sector—has direct consequences for investment, employment and community high streets.
Kate Nicholls, Chair of UKHospitality, commented that “business closures, job losses, curtailed investment, consumer price rises and lost opportunities for young people are all direct impacts of the choice made to inflict £3.4 billion of additional annual cost on our sector”.
The sector argues that without policy change, these impacts will continue to intensify.
The Budget, due in just over two weeks (Wednesday, 26 November), will now be watched closely by hospitality operators throughout the UK. They hope the government will respond to the open letter’s call for relief to support business growth, protect jobs and revive local high streets.
