Hospitality bosses warn Budget tax rises will force closures

Published On Nov 10, 2024, 4:18 AM

The hospitality sector is facing significant challenges due to new tax increases resulting from the recent Budget. More than 200 industry leaders warn that rising National Insurance Contributions (NICs) will lead to business closures and job losses, particularly impacting smaller establishments that cannot pass on costs to consumers. The changes will raise the employer NICs rate from 13.8% to 15% and reduce the income threshold for tax contributions, which could deter investments and lead to reduced worker hours. Industry leaders are urging the government for relief measures to protect low-earning employees and avoid drastic repercussions on the industry.

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Stock Forecasts

AI prediction results, not representative of any investment advice.

YUMC View YUMC chart on TradingView

Negative

The hospitality industry is under significant pressure due to increased operational costs, which may lead to decreased profitability and store closures. Companies in this sector that rely heavily on foot traffic and affordability will likely struggle, especially small to mid-sized firms. This could negatively affect their stock performance.

MAR View MAR chart on TradingView

Negative

Larger hospitality chains that have more resilience to economic fluctuations may be better positioned to absorb cost increases. However, the overall sentiment is that the entire sector may face headwinds, leading to lower stock prices and investor sentiment.

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