Tue 1st Apr 2025 - Hospitality hit with £3.4bn annual cost increases, business rates reform must offer ‘maximum discount’ Hospitality hit with £3.4bn annual cost increases, business rates reform must offer sector businesses ‘maximum discount’: Hospitality businesses will from this month face an additional £1.9bn in wage costs and £1bn of employers’ national insurance contributions, plus £500m in business rates as a result of relief being lowered from 75% to 40%, UKHospitality has warned. The trade body said the cost of employing a full-time member of staff, aged over 21-years-old, has increased by more than £2,500 annually, a 10% increase. Furthermore, the cost of employing staff aged below 18-years-old has increased by 18%, and for employees between 18 and 20 years old, it has increased by 16%. As a result, seven in ten hospitality businesses have already they will have to reduce their employment levels, while a third will reduce trading hours and 15% believe they will have to close at least one site. UKHospitality is now urging the government to urgently bring forward a plan for hospitality businesses that enables the sector to unlock growth and jobs. It said this would have to set out how Downing Street intends to reduce the costs and red tape that plague the sector and should include the Treasury ensuring its business rates reform – to be unveiled in the autumn – offers the maximum discount for hospitality businesses. UKHospitality chief executive Kate Nicholls said: “The costs hitting hospitality this month are eye-watering, and the impacts it will have on businesses, teams and communities are stark. We’ve already seen a chilling effect on investment plans and job creation – all of which have been put on hold or shelved. As costs begin to bite, we’ll see venues having to tighten their belt even further through restricting trading hours or, in a worst-case scenario, cutting jobs. None of this helps the government’s ambitions to drive growth or get people back into work. It needs sectors like hospitality to achieve both of those goals, but with disjointed tax and welfare policies, that is looking more difficult than ever. I urge the government to work with us to bring forward a plan for hospitality that addresses these issues and backs the sector to serve Britain and create places where people want to live, work and invest.”