The hospitality sector has warned the UK government it is in danger of being “taxed out” as a result of the 2024 budget.
In a letter to PM Keir Starmer, UKHospitality said changes in the budget, including increases to employers’ National Insurance contributions, directly contributed to a reversal in the sector’s ability to create jobs.
Between October 2024 and May 2025 the sector lost 69,000 jobs, according to the trade association. In the same period the previous year, hospitality created an additional 18,000 jobs.
As of April 2025, employers’ NICs rose by 1.2 percentage points to 15%, while the threshold for companies to start paying lowered from £9,100 to £5,000.
“The NICs change was socially regressive and had a disproportionate effect on entry-level jobs,” said UKHospitality chair Kate Nicholls. “Without a change of tack from the government we could be looking at over 150,000 fewer workers in hospitality, when we should be bringing people into the jobs market.”
The trade body is calling for this year’s budget to reverse the job losses of the past few months, urging the government to “fix” NICs and boost jobs by extending the existing exemptions to include both young people and those moving from welfare to work.
UKHospitality is also calling for business rates to be cut to revive high streets, and VAT on hospitality to be cut to drive investment.
“In the years following the financial crisis we created one in five net new jobs and today employ 3.5 million people,” said Nicholls.
“The government needs sectors like hospitality to create jobs and meet their ambition to get more people back into work. The economy needs jobs. Hospitality creates them. But we are being taxed out.”
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