UKHospitality warns the Budget over youth job starts
UKHospitality has warned the government that rising employment costs put the sector’s 300,000 annual job starts for young people at risk. The trade body made the case on 8 October, three weeks before the Budget on Wednesday 28 October.
A third of all first jobs for under-25s
UKHospitality’s analysis of Office for National Statistics data puts hospitality at 31 per cent of all first jobs for people aged 16 to 24. The same analysis records that the sector employs 18.2 per cent of all young people in work. The body counts around 300,000 job starts a year in that age group.
Eighty-two pence in tax per pound of profit
British Retail Consortium analysis carried out by Flint Global gives hospitality a business tax bill of 82p for every £1 of pre-tax profit in 2025/26. Retail paid 72p. The eleven-sector average is 50p, and banking paid 40.5p.
UKHospitality records more than £5bn in additional costs over the past two years and 100,000 hospitality jobs lost in the same window. The body puts those lost jobs at 45 per cent of all roles lost across the UK economy.
The ask: a £10,000 NIC threshold
UKHospitality wants the employer National Insurance threshold raised progressively to £10,000. Chief executive Allen Simpson put the timing at the end of the Parliament.
Rachel Reeves cut the threshold from £9,100 a year to £5,000 in the 2024 Budget. UKHospitality’s campaign page records 774,000 hospitality workers drawn into the lower threshold and a 10 per cent rise in the cost of employment per person. The body also laid an amendment seeking a delay in implementation until a full impact assessment had been carried out.
Simpson on the record
“Hospitality has always been the nation’s biggest creator of jobs for young people,” Simpson said. “A third of all first jobs for under-25s are in hospitality. We create around 300,000 job starts each and every year.
“That job creation superpower has been put in jeopardy over the past two years, with hospitality hit by more than £5bn in extra costs. The result? 100,000 jobs lost and a tax burden double that of a bank.
“The first Budget under the new Prime Minister should be a moment for change. Put the last two years behind us and move forward by backing hospitality to deliver jobs in every postcode.”
He closed on employment costs. “It’s time to cut the cost of employment, let hospitality hire again and allow us to help solve the Neets crisis.”
The wider submission
The NIC ask sits inside a four-part submission UKHospitality published on 9 September. The four measures are a cut in VAT for hospitality to 10 per cent, a fix for business rates, a reduction in employer NICs, and the replacement of the holiday tax with a tourism bonus.
The tax-burden figures followed on 1 October. Hospitality’s own tax burden was £22.9 billion in 2025/26, and the BRC and UKHospitality put the two sectors’ combined bill at £62 billion.
Where the decision sits
The threshold change is UKHospitality’s request. The decision rests with the Chancellor at the Budget on Wednesday 28 October.