THE LEADING PUBLICATION FOR THE HOSPITALITY SECTOR & LICENSED TRADE Issue 269
Issue 251 www.CLHNews.co.uk
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April’s Tax And Wage Hikes Leading To “Surge” In Closures
The Bowden Group Hospitality Business Mentoring since 1989
Pubs are closing at their fastest rate since last summer following April’s tax raid, according to new figures.
Wage, will increase the cost of full-time employment by at least £2,500 per person.
A series of tax hikes introduced by Chancellor Rachel Reeves in her 2024 Autumn Budget has resulted in the number of pubs declaring insolvency jumping to 67 in April, the highest number since last July when 75 pubs went bust, according to accountancy firm Price Bailey.
Both hikes were announced by Reeves in her first Budget in October last year and came into effect in April.
The research found that 21 per cent of the 8,156 operating pubs have negative net assets on their balance sheets, which deems them technically insolvent.
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It said these pubs are ‘vulnerable to going bust (cash flow insolvent), which occurs when businesses are unable to make payments to suppliers or lenders.’ UKHospitality said, prior to the increase coming into effect, that the increase in employer’s National Insurance contributions, plus a higher National Minimum
The hospitality sector, which employs 3.5m people, has been particularly hard hit as it relies on part-time and minimum wage workers.
STRUGGLING PUBS Matt Howard, head of the insolvency and recovery team at Price Bailey said: “The early signs are that the tax and minimum wage hikes which took effect in April are already tipping some struggling pubs over the edge.
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