Pause tax raid or we lose staff pubs tells Chancellor

Pubs and hospitality firms have urged Chancellor Rachel Reeves to delay a planned hike in National Insurance (NI) from April, warning it could result in widespread job losses.

It follows a survey from four industry trade bodies that revealed 70 per cent of businesses in the sector plan to reduce staffing levels as a result of the increase in NI contributions (NICs) – which was unveiled by Reeves in the Autumn Budget, putting thousands of jobs at risk.

The survey, carried out by the British Beer and Pub Association, the British Institute of Innkeeping, Hospitality Ulster and UKHospitality, also reported that 29 per cent of businesses said they would cut back on opening hours as a consequence of rising costs. And 15 per cent said they would need to shut at least one of their venues to offset the surge in costs.

The firms that responded operate 8,300 sites across the UK.

'At a time when hospitality has been one of the top contributors to economic growth, the last thing the Government should be doing is piling on costs that will impact employment and cut off our ability to grow,' the four trade bodies wrote in a joint statement.

They added: 'We want to work with the Government so we can continue to vitally boost the economy, which is why we urge them to delay the changes to the employer NICs threshold.'

Pubs and other hospitality companies have pleaded with the Chancellor to do more to support the sector by reversing the planned NI hike as well as lowering the rate of VAT charged on the industry to encourage spending from consumers.

From April 6, the threshold at which employers pay National Insurance contributions on staff wages will fall from £9,100 to £5,000 a year.

While Labour had repeatedly said the tax rise would not hit working people, companies warn that the higher levy burden will force them to cut jobs, close shops and give out fewer pay rises.

The latest warning from hospitality firms followed a poll from the Federation of Small Businesses which last week revealed a third of small firms were planning to axe jobs ahead of a new employment rights Bill as well as rising labour costs triggered by Budget tax hikes and the rising minimum wage.

It piles pressure on Reeves as she prepares to deliver her Spring Statement next month.