Hospitality Sector Faces £1 Billion Cost Increase from National Insurance Changes

Chancellor Rachel Reeves’s budget lowers employer National Insurance threshold and raises rates, impacting 774,000 workers and threatening jobs and businesses.

• The threshold for employer National Insurance contributions will drop from £9,100 to £5,000, affecting 774,000 hospitality workers starting in April.
• The hospitality industry is expected to bear an additional £1 billion in costs due to these changes, according to UKHospitality.
• Employers’ National Insurance rates will rise from 13.8% to 15%, contributing to a £25 billion annual tax increase for businesses across sectors.
• Industry leaders warn these measures will lead to reduced hiring, job cuts, increased prices, and stalled expansion plans, particularly for smaller businesses.
• UKHospitality has proposed alternative measures, such as a lower tax rate for low earners, to mitigate the impact on the sector’s most vulnerable workers.

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