Last year’s autumn Budget unveiled a number of increases for the on-trade that will come into force from Tuesday 1 April.
This included employer national insurance contributions, which are set to increase from 1 April – up 1.2 percentage points to 15%.
As a result of the hike, which is estimated to cost the sector £3.4bn according to UKHospitality, almost three quarters of sector bosses will reduce staff numbers, a joint survey from trade bodies found.
There will also be further increases to employment costs with a rise in national living wage for those aged 21 and over to £12.21 an hour.
This will mean the annual wage cost for a full-time employee, working 38 hours a week will soar by more than £1,000.
Unprofitable businesses
Furthermore, the current business rates discount will reduce from 75% to 40%.
The average annual business rates bill is expected to rocket from £3,938 to £9,451.
British Institute of Innkeeping CEO Steve Alton warned businesses were already cancelling investments and jobs were being lost.
He told The Morning Advertiser: “The significant tax rises coming into force in April are a hammer blow to pub operators already battling incredibly high costs of doing business particularly with embedded inflation in food and drink costs and unfair energy prices.
“Further increases in the cost of employing people through rises in national insurance contributions and the national minimum wage combined with business rates payments more than doubling, are expected to leave 80% of our members unprofitable.
“We are already seeing jobs being lost and investment being cancelled, all slowing vital growth and losing essential local skilled jobs.”
Immeasurable social value
The trade body boss called for the sector’s value to be recognised by the Government.
“Our pubs provide invaluable flexible employment, many first jobs, students, working parents and those re-entering the workplace,” Alton added.
“Our pubs are foundational in local economies, provide immeasurable social value in their communities and support social mobility with accessible skilled jobs for all.
“The unique value of pubs must be formally recognised by [the] Government and matched with fair taxes to unlock their full potential before it is simply too late.”
