The mounting tax and cost pressures are expected to push many operators towards what they describe as an unsustainable operating position.
A flash poll of 345 night time economy businesses found that sharply higher business rates, combined with rising wages, employer national insurance, alcohol duty and other tax increases, are forcing operators to reconsider staffing levels, pricing and opening hours in order to remain viable.
“We’re not talking about growth, we’re talking about survival,” said one nightclub operator. “Staff livelihoods, community spaces, and nights out are all at stake if costs keep rising like this.”
Costs continue to climb
Operators report that running costs are now 30 to 40% higher than in 2020, driven by a combination of policy changes and inflationary pressures.
These include two Autumn Budgets that increased tax burdens, two rises in the minimum wage, lower thresholds for employer national insurance contributions, alcohol duty increases and business rates revaluations that have pushed many venues into higher multipliers.
Currently, night time venues benefit from 40% business rates relief, but this is due to end in 2026. When combined with higher rateable values, city-based nightclubs and late-night venues say they face a “perfect storm” of rising costs.
Flash poll
The survey shows the scale of concern across the sector:
- 50% of venues expect business rates to rise by 50% or more
- Almost 20% anticipate increases of between 76% and 100%
- 87% plan to raise prices for customers
- 75% expect to cut staff hours or jobs
- Up to 15% say their long-term viability could be threatened without support
Operators warn that these pressures will translate into reduced opening hours, higher prices and fewer opportunities for emerging artists and performers.
Calls for targeted support
Michael Kill, chief executive of the Night Time Industries Association (NTIA), said transitional relief would only delay the impact of rising costs.
“The night time economy is managing significant cost pressures. Transitional relief will help, but it is temporary. The recent revaluation has pushed many city nightclubs into higher multipliers, even as wage, national insurance, alcohol duty, and other tax costs have risen,” he said.
“Without targeted support, venues will face difficult decisions around staffing, pricing, and opening hours.”
The NTIA is calling on government to introduce targeted business rates relief for night time economy venues, review revaluations to better reflect late night trading realities, and protect the sector’s economic and cultural contribution by lowering VAT and reversing employer national insurance contribution threshold changes.
“The night time economy supports jobs, tourism, and local vibrancy,” Kill added. “With proportionate policy measures, these venues can remain sustainable and continue to enrich communities and city life.”
