UKHospitality has said that today's Budget is the 'latest blow' for hospitality businesses, with an increased annual tax bill of £3 billion in 2025.
However, the Chancellor announced from 2026/27, there will be a permanently lower level of business rates for hospitality. This one was of UKHospitality’s key asks.
Costs in 2025
Kate Nicholls, Chief Executive of UKHospitality, said: “This Budget is the latest blow for hospitality businesses. Rising taxes, increasing costs and fragile consumer confidence risk bringing growth to a grinding halt.
“In the short-term, the tsunami of employment costs coming in April will ultimately do more to hamper growth than incentivise it. Increases to employer NICs and wages will make it harder for businesses to support employment and invest in their businesses.
“Avoiding the business rates cliff-edge next April was critical and it was important that some relief has been extended. However, the reduced level of 40% is another cost that businesses have to deal with. For those small- and medium-sized operators, their rates bills will still go up in April.
“All of this means that 2025 will be painful for hospitality, with an increased annual tax bill of £3 billion for the sector.
Long-term reform
“However, there are reasons for longer-term positivity. I am pleased that the Chancellor is implementing UKHospitality’s recommendation for a permanently lower level of business rates for hospitality. Levelling the playing field in this way recognises the importance of the high street and the role it plays in our communities and economy.
“We need to see the detail and the Government must work with the sector in the design and delivery of this significant change to get it right.”
