Budget tax grab will put hospitality jobs at risk, trade groups warn

UK business leaders have warned they will be forced to scale back on hiring and investment if business rates relief is not extended in the upcoming Budget.

In an open letter today, the trade bodies UK Hospitality and British Institute of Innkeeping sounded the alarm over a potential decline in profit margins and sweeping job cuts if the government’s saddles them with a heavier tax burden.

It comes following a recent survey by British Beer and Pub Association that revealed over half of businesses within the hospitality sector would reduce their employment levels if business rates relief is not extended.

Some 76 per cent of businesses also said their profit margins would decline, with 51 per cent threatening to cancel planned investment strategies.

In a joint statement to the Chancellor, the trade bodies said: “This is a stark reminder of what faces our pubs, brewers and hospitality venues if business rates support isn’t addressed at the Budget.

“Many cash-strapped pubs, brewers, bars, restaurants and cafes, to name a few, would simply be unable to survive their rates bills quadrupling.

“Not only does inaction risk half of businesses having to cut jobs and cancel investment, but it also means a quarter would have to consider closing at least one site, which might be their entire business. This worst-case scenario outcome would rob towns and cities of vital community hubs.”

Are jobs at risk?

A number of small and medium-sized enterprises (SMEs) leaders have also threatened to scale back on hiring activity if the outcomes of the Autumn Budget do not align in their favour.

It comes as the business leaders call for more funding and grant support to help with resourcing ahead of the proposed changes in the Employment Rights Bill.

According to newly-revealed research by Breathe HR, 63 per cent of the 527 SME bosses sureyed have said the changes will “disproportionately impact” their businesses.

Around 17 per cent said without support, the changes could cost their firms up to £1,000 per employee.

“We have already been booked by some clients who are looking at reducing their workforce due to the increased costs associated with employing people that the Employment Rights Bill could bring about,” Natalie Ellis, founder of Rebox HR, said.

Ellis added: “The new legislation has many merits, but there’s no doubt it’s going to put a significant financial strain on SMEs.

“Support towards funding statutory payments – and the ability to recover at least some of the cost of implementing the Employment Rights Bill from the government – would be a huge help to SMEs, and could help instil more confidence to small businesses when it comes to growing and recruiting over the coming months.”

A Treasury spokesperson said: “We’re supporting businesses like our well-loved pubs through pledges to make the business rates system fairer, cap corporation tax at 25 per cent and to publish a corporate tax roadmap so that they have some welcome certainty to plan for the future.”

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