#TAXEDOUT - join our Budget campaign
The 2024 Budget was a hammer blow to hospitality.
In the nine months since, hospitality has lost 89,000 jobs – three times that seen in the wider economy.
Compared to the same period over the past decade, hospitality has, on average, created 26,000 jobs each year.
The country needs jobs. We create them. But we are being #TaxedOut.
Hospitality businesses are reporting jobs being lost, hours cut, investment cancelled and businesses closing. A sector that has grown faster than the wider economy in recent years has been badly damaged.
The burden on hospitality is unfair. Even before the Budget, we pay the most tax of any sector in the economy – as much as 75% of pre-tax profit.
Our recent survey of hospitality businesses showed that:
1/3 are now operating at a loss
76% have had to increase prices
63% have reduced the hours available to staff
1/3 of businesses are restricting opening hours
4 in 10 have reduced investment
We are a leading creator of part-time jobs, first jobs for young people, older people and people returning to the jobs market. And we are creating growth across the country, not just in major cities, but in towns and in rural and coastal communities.
We want to get back to growth. But we need three changes in the Budget.
And we need your help. Find out below what we are asking for and how you can use your voice to tell the Government to change course before hospitality is #TaxedOut.
What we are asking for
Tax on our sector is the highest in the economy. And that is costing jobs. It needs to change. We are calling for three things in the Budget.
Lower business rates to revive high streets
Our high streets are a vital social and economic resource, but running businesses in the middle of our communities is being punished by the tax system.
The Government should follow the announcement in last year’s Budget of business rates reform with a maximum discount for hospitality businesses under £500,000 rateable value, while exempting larger hospitality properties from the business rates surcharge.
To find out more about our work on business rates, click here.
Fix NICs to boost jobs
Last year’s employer NICs changes were badly designed which meant that sectors like hospitality that provide accessible careers were hit hardest. The impact on someone earning £25,000 was twice as bad as someone earning £150,000.
We are calling for the extension of the exemptions to include young people and people returning to work from welfare. That would support job creation and reduce the benefits bill.
Cut VAT on hospitality to drive investment
While other countries have supported hospitality with a lower rate of VAT, hospitality in the UK pays the full 20% – putting our tourism industry at a disadvantage and making it harder for people to support their local businesses. The EU average VAT on hospitality is 10%-13%.
The Government should follow the majority of European rival nations by reducing VAT on the sector.
How you can help
We need everyone in hospitality to tell the Government that we are being #TaxedOut.
The more pressure we can put on the Government to address the impacts of these measures, the more chance we have of getting changes that deliver growth, employment and investment.
We held a webinar for members to breakdown the campaign
Watch it back here
Social Productivity - why your hospitality business matters
The Social Productivity Index
The UK economy needs to grow. But we need that growth to reach everyone, everywhere.
Government policy from tax, to the industrial strategy, to skills has focused on a limited set of sectors. Those sectors represent barely over a quarter of the economy and are focused in a few major cities, and create jobs that have high barriers to access.
It is increasingly clear that the country has a different view of what a successful economy looks like. They want growth that is resilient, that it is available across the regions and nations of the UK, and that brings change and opportunity across different social groups. People want to see their highstreets and communities thrive, and they want good jobs for themselves and their families.
The UKHospitality Social Productivity Index shows that the high productivity sectors in the Industrial Strategy only account for less than 30% of the economy. The growth they create is often limited to specific geographies and specific social groups, with jobs that have high barriers to access.
By contrast, the Index shows that Hospitality is the highest performing socially productive sector, creating jobs and routes into training and careers which are available to everyone, everywhere. It creates places where people want to live, work and invest.
We contribute £140 billion in economic activity and £54 billion in tax receipts to the economy every year; this growth is broad rather than narrow; we are an inclusive employer of 3.5 million people, providing jobs for everyone, everywhere from first jobs to routes into leadership and skilled careers; and this growth is national rather than weighted towards London and the South East; we build – and rebuild communities, acting as an economic and social focal point for growth and regeneration right across the country.
