Hospitality pays 82p in business taxes for every pound of pre-tax profit it makes, the highest effective tax rate of any sector in the UK, according to analysis the British Retail Consortium commissioned from the economic consultancy Flint Global.
Hospitality pays the highest rate of 11 sectors
The British Retail Consortium compared the taxes and profits paid across 11 main sectors of the economy. For every £1 of pre-tax profit, hospitality businesses paid the equivalent of 82p in business taxes. Retail businesses paid 72p.
Those are the highest rates of the eleven sectors. They sit above the 50p average effective tax rate across the sectors and above the banking industry at 40.5p.
The BRC reports that both rates rose further in 2026/27.
Two sectors, a £62 billion bill
Hospitality and retail paid a combined £62 billion in taxes in 2025/26, through business rates, employer National Insurance Contributions, VAT and other government taxes.
Hospitality alone carried a business tax burden of £22.9 billion. That figure sits in the chart caption on the UKHospitality copy and in TheIndustry.fashion's report on the same commissioned analysis. TheIndustry.fashion gives hospitality an effective tax rate of 81.6% and puts retail at £39.1 billion and 71.5%.
The BRC release describes the two sectors as two of the nation's largest employers and the largest source of entry-level and flexible work.
The job losses behind the rates
The BRC release attributes the pressure to employment costs added in the 2024 Budget. It records that retail lost 122,000 jobs in two years and that hospitality employment fell by 93,000 people.
UKHospitality frames the burden as fewer jobs for young people, foregone investment and higher prices for customers. The two trade bodies commissioned the research.
High streets carry almost a third of the rates
Retail and hospitality together cover almost a third of the total raised by business rates. One in seven high street properties across the country stands empty.
The BRC puts inflation at 3.1%, above the Bank of England target of 2%, and says further tax rises risk adding to cost-of-living pressure on households.
The call ahead of the Budget
The BRC and UKHospitality have asked the Chancellor to put local communities first and cut the cost burden on the two sectors. Their stated measure is to remove high street retail and hospitality businesses from the government's business rates high-value multiplier.
Simpson adds two further requests: a larger retail, hospitality and leisure discount, and support for the businesses hardest hit by the 2026 revaluation, in line with the support given to pubs.
Simpson: vastly overtaxed
Allen Simpson, chief executive of UKHospitality, said: "This staggering data proves what we have long been saying: that hospitality is vastly overtaxed and has the highest tax burden in the economy."
"With more than 80% of every pound made going back to the Government, it is no surprise that our ability to create jobs, drive growth and regenerate the high street has been severely damaged."
"If the Government wants to create jobs and drive growth in every postcode, it needs hospitality and the high street firing on all cylinders," he said. "Hospitality's tax burden needs to be dramatically reduced."
Dickinson: a choice for the Chancellor
Helen Dickinson, chief executive of the British Retail Consortium, said: "The Chancellor faces a choice: to continue to pile taxes onto our high streets and the millions of households that rely on them, or to give these businesses the breathing space needed to create jobs, deliver growth, and hold down prices."
"For every £1 of pre-tax profit made by retail, the equivalent of 72p is now paid in business taxes," she said. "For the benefit of high streets, young people and shoppers everywhere, the Chancellor should use the Budget to deliver a clear path to reducing the rates burden, now and in the future."
Where the analysis comes from
The British Retail Consortium commissioned the analysis from Flint Global. The BRC published its release on 30 September 2026. UKHospitality carried its version of the findings under a 1 October 2026 page date.