As of April, hospitality venues will be left with an average ten per cent increase in the cost of each individual employee – a cost UK Hospitality chief Kate Nicholls has said is “not sustainable”. She’s not alone in arguing this, so why are the Chancellor and Prime Minister unable to understand the most simplistic of equations – tax increases do not equal economic growth.    

New analysis by UK Hospitality has highlighted how hospitality businesses will end up facing an average 10 per cent hike in the cost of employing each individual member of staff under new National Insurance Contribution (NIC) guidelines set to take affect from April onwards.

Meanwhile, the trade association says that the NIC price-tag attached to one full-time adult employee earning National Living Wage will balloon from £1,863 to £2,869: a stonking 53.9 per cent an increase. 

According to the Institute for Fiscal Studies, hospitality’s dependency on low-income staff makes it particularly exposed to the lowering of the NIC earning threshold: with the cost of employing even part-time staff like a single parent on a nine-to-three weekday shift or a student working 14 hours over a weekend set to rise by £2,100 and £1,140 respectively. 

UK Hospitality CEO Kate Nicholls has called these figures “eye-watering,” and said that they go “far, far beyond what anyone’s worst case scenario was.” 

“The overwhelming feedback from the sector is that this is just not sustainable and will ultimately do real harm to our ability to support employment,” she added. “Hospitality venues will now have to ditch their ambitions to employ more people and do the very opposite: cut hours, scale back recruitment, and, in extreme circumstances, let people go, because they simply can’t afford the scale of these costs.”