Almost a third (29%) of the businesses surveyed in January – representing more than 8,000 sites – said they would reduce trading hours as a result of the extra costs, and 25% said they had no cash reserves left, a rise of six percentage points from three months earlier.
The trade bodies are urging the government to postpone the changes to employer national insurance contributions (NICs) to avoid the immediate impact on investments and jobs, and allow the hospitality industry to continue contributing to economic growth.
The measures are ultimately expected to raise £25bn a year, which ministers say is needed to restore crumbling public services, but have drawn criticism from a string of large businesses, including retailers and hospitality companies, who say they will be forced to cut jobs and raise prices.
“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 trade bodies said in a statement.
More than two-thirds of hospitality businesses will reduce staffing as a result of tax changes taking effect in April, according to research by industry bodiescalling on the government to delay the changes.
