Pubs shutting at 9pm to cut costs after Reeves' tax hike
14 April 2025, 19:48 | Updated: 14 April 2025, 22:47
Pub sector 'worse than Covid' as pubs call last orders at 9pm to offset costs after the Chancellor's tax hike.
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Pub owners have been calling last orders, or shutting, as early as 9pm after Reeves's tax raid.
Brian Whiting said his tax situation was "worse than Covid" as his company was hit by £190,000 extra costs annually.
He's started to close several of his pubs in the South East at 9pm instead of 11pm on weekdays. The kitchens now close an hour early a 8pm some nights.
“I’ve been going on my own for 25 years, and I think this has become the hardest now for hospitality it’s ever been,” Mr Whiting told The Telegraph.
This comes as Chancellor Rachel Reeves increased employers' National Insurance (NI) contributions, and lowered the threshold from £9,100 to £5,000, while increasing minimum wage by 6.7 per cent.
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Mr Whiting told the newspaper: “That drop in the threshold of NI has massively hit me. I’m very proud that we’re often the first job for a lot of youngsters. But is it a false economy now?
“Once upon a time it was good value. We weighed up that they’re not going to be as good as older people because they need to learn, and they might not have the confidence.
“Now, when their wages have gone dramatically up, you’re getting much more value for money as an employer with employees who are a bit older.”
Phil Thorley, owner of Thorley Traverns pub group in Kent, said the NI contributions alone would cost him annually £400,000 extra.
That’s eight grand a week in perpetuity. So we’re going to have to make changes,” he said.
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In addition to the tax hikes, Reeves cut the amount of business rates relief available to smaller retail and hospitality companies.
29 per cent of hospitality business owners surveyed by UK Hospitality said they planned to reduce their opening hours due to costs, reported The Telegraph.
“Pubs are being forced to tighten their belts to weather this tax storm and many are choosing to close on quieter days, or to operate on shorter hours to make ends meet," said Kate Nicholls, the chief executive of UK Hospitality.
“Not being able to trade at full capacity hits a pub’s bottom line but it also makes it more difficult for communities to pop in for a drink or to eat out with friends and family. That is the custom that our pubs desperately need.”
This comes as Sir Sadiq Khan urged councils to give the green light to al-fresco dining plans and later opening hours this summer - in a bid to boost the capital's nightlife.
The London Mayor wants to see pubs and clubs opening later, and more outdoor eating plans, to help struggling businesses, as soon as possible.
It comes after the government announced a new pilot which will give Sir Sadiq extra powers to overturn council decisions to help the nighttime economy.
But LBC understands it'll need a law change and lengthy consultation, meaning it's unlikely to come in this year at all.
Labour reveals grand plan to revive UK's nightlife economy | LBC exclusive
Sources close to the London Mayor said they hope councils will start giving the green light to applications now to help struggling firms.
They're telling local chiefs to stare down opposition from angry local residents who often bid to block the plans.
A City hall source close to the move told LBC that councils were being overly cautious to try and stop legal challenges.
They said: "As the weather warms up again, there’s a real opportunity to support venues across London this summer who have struggled the last few years.
"Late-night openings and al-fresco dining can create a real buzz on high streets, as we saw after the pandemic. We want to work with councils to reap those benefits now, something that could benefit businesses straight away."
