Hospitality firms ‘to incur £1bn costs from employer NICs on 774,000 more workers’
Share:
Industry body says businesses and jobs at risk unless Rachel Reeves’s tax changes delayed or altered. The hospitality industry will incur an extra £1bn of costs for 774,000 of its workers who will be newly eligible for employer national insurance contributions from April, endangering jobs and businesses, a leading industry body has claimed.
UKHospitality, which represents thousands of restaurants, hotels, pubs, cafes and nightclubs, is calling on the government to delay or alter changes to the tax announced in Rachel Reeves’s October’s budget in order to protect jobs. It said hospitality businesses currently employed 1.2 million staff who were not eligible for employer national insurance contributions (NICs), but that number would be cut to 450,000 people as more were dragged into a lower threshold from April. It said the £1bn is on top of £2.4bn of other costs due to hit in April, including rising wage bills.
Kate Nicholls, the chief executive of UKHospitality, said the government was punishing an industry that she said had been the biggest driver of growth in November. “The change to employer NICs is one of the most regressive tax changes ever,” she said, claiming the decision would have “a devastating impact” on businesses, communities and workers, particularly those working part-time or on the lowest hourly pay.
“The scale of this change is unprecedented, bringing three-quarters of a million people into this employer tax for the first time, and the extent of the impact will be enormous. This tax is already forcing businesses to abandon investment, change recruitment plans, reduce headcounts and increase prices to cope with these cost increases.”.
