A recent survey of members from four industry trade bodies showed the tax rises, including an increase to employer national insurance contributions (ENICS), have forced more than half of businesses to cut their workforce.
As a result, some 69% of the 14,300 respondents were operating at or below 85% of required capacity. Some 79% stated they had also increased prices.
In addition, 73% of all respondents said they had less than six months of cash reserves left while one in five had no cash reserves left at all.
Shocking data
Respondents called for a reduction in VAT, amendments to April’s changes to ENICs and delivery of lower business rates, as previously pledged by the Government, to drive growth.
Earlier this week, the Morning Advertiser (The MA) reported eight pubs a week were lost between December 2024 and June 2025 due to the slashing of business rates relief, increasing wage costs and rises taxes.
The survey was conducted by CGA by NIQ on behalf of the British Beer & Pub Association (BBPA), UKHospitality (UKH), Hospitality Ulster and the British Institute of Innkeeping (BII).
In a joint statement, the trade bodies said: “This shocking data reinforces the urgent need for Government to recognise the incredible pressure hospitality businesses have been put under, particularly since April, and illustrates why it should come forward with measures to support this vital sector at the Budget.
Impossible decisions
“Unsustainable tax increases are squeezing businesses, stifling growth and investment, and threatening local employment, especially for young people.
“It is forcing businesses across the sector to make impossible decisions to cut jobs, put up prices, reduce opening hours and sadly limit the support they desperately want to give their communities.
“Hospitality is united in the measures that will reverse this trend and drive growth: a reduction in VAT for hospitality, changes to employer NICs and permanently lower business rates for the sector.
“Now is the time to act and back a vital British sector that supports the economy, jobs, and local communities. We urge the Government to do so at the Budget this autumn.”
