The analysis found hospitality businesses paid the equivalent of 82p in business taxes for every £1 of pre-tax profit generated.
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Retail was also among the hardest hit sectors, paying 72p in business taxes for every £1 of pre-tax profit.
The trade bodies said the figures showed high street businesses were being “punished” by tax costs, with pressure on prices, jobs and investment.
Cost burden
The analysis compared taxes and profits across 11 major sectors of the economy.
It found retail and hospitality paid a combined £62bn in taxes during 2025/26, including business rates, employer national insurance contributions, VAT and other Government taxes.
The BRC said the tax burden on retail and hospitality was above the 50p average across the 11 sectors, while banking paid 40.5p for every £1 of pre-tax profit.
UKHospitality chief executive Allen Simpson said: “This staggering data proves what we have long been saying, that hospitality is vastly overtaxed and has the highest tax burden in the economy.
“With more than 80% of every pound made going back to the Government, it is no surprise that our ability to create jobs, drive growth and regenerate the high street has been severely damaged.
“If the Government wants to create jobs and drive growth in every postcode, it needs hospitality and the high street firing on all cylinders.”
Budget call
Simpson called for the Government to reduce the sector’s tax burden, including by increasing retail, hospitality and leisure business rates relief and providing additional support for businesses affected by the 2026 revaluation.
The sectors have faced rising costs over the past year, including higher employer national insurance contributions and changes to business rates relief.
The trade bodies warned further tax rises could add to cost of living pressures for consumers.
BRC chief executive Helen Dickinson said: “The chancellor faces a choice, to continue to pile taxes on to our high streets and the millions of households that rely on them, or to give these businesses the breathing space needed to create jobs, deliver growth and hold down prices.”
The warning comes ahead of the Budget on 28 October, with hospitality trade bodies continuing to call for action on tax, business rates and employment costs.
