Over 1,100 pubs and restaurants shut down in the UK

October tax increases have led to significant closures in the UK hospitality sector.

Over 1,100 pubs and restaurants close following tax hikes

Over 1,100 pubs and restaurants in the UK have closed since Chancellor Rachel Reeves implemented tax hikes last October, with the rate hitting two closures per day. The hospitality sector faces severe challenges from rising costs, including an increase in National Insurance and a 6.7 percent minimum wage rise, which together add £2.9 billion to business expenses. Smaller restaurants are particularly vulnerable, with numbers declining nearly three percent this year. Kate Nicholls, chair of UKHospitality, emphasized that independent businesses are suffering disproportionately due to these tax increases. The sector has already seen the loss of 16,000 venues since the pandemic began, with concerns growing over future changes to business rates that could adversely affect larger hospitality companies as well.

The closures of over 1,100 pubs and restaurants highlight a critical moment for the UK hospitality sector. Rising costs from tax policies and minimum wage increases are pushing many smaller businesses to the brink. As Kate Nicholls pointed out, the system currently penalizes job creation and finances in favor of high street businesses. This situation poses a long-term risk to the diversity and character of the hospitality landscape in the UK.

Highlights

The future of UK hospitality hangs in the balance as the tax burden grows heavier.