New Insights Emerging from UKHospitality

Recent analysis from UKHospitality indicates that over 774,000 workers from the hospitality sector will be subjected to the new employer National Insurance Contributions (NICS) tax structure introduced by the government.

The imminent adjustments to employer contributions are seen as regressive, significantly impacting part-time and flexible workers prevalent in hospitality roles. Currently, around 1.2 million hospitality workers are exempt from these contributions. However, by April, that number will plummet to about 450,000, drastically broadening the tax burden for the industry.

UKHospitality estimates that these changes could impose an additional cost of £1 billion on the sector, exacerbating previous financial strains.

Alternatives suggested include:

• Implementing a new NICS rate of 5% for earnings between £5,000 and £9,100, instead of the standard 15%.
• Creating a lower tax bracket for low-income earners who predominantly work part-time.

Kate Nicholls’ Statement

Kate Nicholls, Chief Executive of UKHospitality, stated:

“The change to employer NICs is one of the most regressive tax changes ever.”
Translation: “Le changement des cotisations de l’employeur à l’assurance nationale est l’un des changements fiscaux les plus régressifs jamais réalisés.”

She further explained the challenges this imposes on businesses:

“At a time when we saw hospitality as the biggest driver of economic growth in November, it’s completely misguided to be punishing a sector that has such growth potential.”
Translation: “À un moment où nous avons vu l’hospitalité comme le plus grand moteur de croissance économique en novembre, il est complètement absurde de punir un secteur qui a un tel potentiel de croissance.”