UKHospitality has just noted that the 1.25% National Insurance reverse, to be announced in Chancellor Kwasi Kwarteng’s mini-Budget tomorrow, is ‘excellent news’ for the sector and its customers.
Scrapping the increase announced just six-months-ago means hospitality businesses will save an average £9,600 that they can plough into growth and development; while customers will be better able to enjoy the affordable pleasures that the sector provides.
Revealed by the Chancellor ahead of his mini-Budget, the change will take effect from 6 November, and means more than 900,000 businesses across all sectors will enjoy a tax reduction of close to £10,000, with 28m people saving an average £330-per-year.
UKH Chief Executive Kate Nicholls (pictured) said, “Hot on the heels of government support for businesses facing rising energy costs, cutting employer NI contributions (NICs) is more excellent news for the hospitality sector, and will help businesses reduce their costs as they attempt to return to profitability while facing a perfect storm of financial pressures, including the interest rate rise, VAT back to 20%, and the frankly unfair business rates regime.
“Cutting employee NICs is a great way to ensure people keep more of their money, primarily so that they’re able to pay their bills, and then to enjoy affordable luxuries, such as visiting hospitality venues.
“This announcement is particularly welcome, as UKHospitality has long campaigned for an employer NICs regime that supports job creation, which this move will certainly help towards.”
The 1.25% NI rise was introduced by former Chancellor Rishi Sunak, in April.
Separately, UKHospitality is urging further Government support for the industry through a VAT rate cut and the reform of business rates, in their current form it says are ‘unfair’.