Curry houses’ future uncertain amid rising costs
Industry leaders from the curry sector have called on the government for support on a range of issues, including the ongoing impact of the cost-of-living crisis on hospitality businesses, planned rises in the costs of energy and a need to act on the price of ingredients.
The Bangladesh Caterers Association (BCA) said it is calling for widespread reductions which can be passed onto customers in a drive to encourage diners back into restaurants.
The organisation said: “We are facing a battle on multiple fronts, from rising costs to punitive immigration laws. On behalf of our members, we will ensure the voices of restaurants up and down the country are heard by those in a position of power and we call on Labour to do the right thing and support us in any way they can.
“We have faced a challenge like never before and we now need to see support to help us not just survive, but thrive. We are seeing restaurants around the country closing week in, week out. We can’t afford to lose the Great British curry. We need to see action now.”
Budget woes
Prior to this year’s Budget, which took place on 30th October, Oli Khan, BCA president, had also called on the government to reverse its decision to axe small business rate relief for eligible retail, hospitality and leisure properties, or risk the closure of curry houses.
The relief, which provides eligible occupied, retail, hospitality, and leisure properties with a 75 per cent relief, up to a cash cap limit of £110,000 per business, was due to end next March.
In this year’s Budget however, Chancellor Rachel Reeves announced that the small business rate relief for retail, hospitality and leisure properties would not be axed; instead, it will be replaced by a 40% relief in 2025-26, up to a cash cap of £110,000 per business. From 2026-27 permanently lower tax rates will be introduced for retail, hospitality & leisure properties.
In response to this change, Kate Nicholls, chief executive of hospitality industry association UKHospitality said: “Avoiding the business rates cliff-edge next April was critical and it was important that some relief has been extended. However, the reduced level of 40% is another cost that businesses have to deal with. For those small- and medium-sized operators, their rates bills will still go up in April.”
The association also described the Budget as the ‘latest blow’ for hospitality businesses, saying it would result in an increased annual tax bill of £3 billion in 2025. It predicted that 2025 will be a painful year for hospitality.
The Budget at a glance and what it means for hospitality
National Insurance hikes From April, the rate employers pay in National Insurance will rise from 13.8% to 15%, and the threshold at which they start paying the tax on each employee’s salary will be reduced from £9,100 per year to £5,000. The Office for Budget Responsibility, the UK’s official economic forecaster, said it assumed “most” of the increased National Insurance cost would be passed on to workers and consumers from employers through lower wages and higher prices.
New analysis by UKHospitality revealed that the employment tax measures in the Budget will increase the cost of employing a full-time staff member by at least £2,500. (This new breakdown of costs is based on a typical staff member, aged 21 or older, earning the National Living Wage and working 38 hours per week).
Business rates relief reduced: The relief will drop to 40% from 75% for 2025-26 from the 1st of April 2025, up to an £110,000 cap. Many businesses could still see their business rates more than double.
