Business Taxes Set to Rise Again, Leaving UK Restaurant Industry in Despair

The British government has decided to support the pub industry to mitigate the impact of rising business rates, but most of the restaurant industry will not benefit from these concessions, causing strong dissatisfaction among restaurant owners.

Bloomberg reported on Sunday (January 25) that British Chancellor of the Exchequer Jeremy Hunt announced a rise in business property taxes last November, and recently hinted at the World Economic Forum in Davos that a package of support measures would be introduced for the pub industry to alleviate the pressure from this tax increase.

The new business rates will come into effect in April this year, at which point catering businesses, including hotels, restaurants, and clubs, will have to pay higher taxes without receiving the same assistance as the pub industry.

The British catering industry is already overburdened, with rising minimum wages, rents, and energy costs, leading to numerous store closures and stagnation in growth, investment, and recruitment across the sector.

Florian de Chezelles, 31, owner of The Salad Project, a healthy eating chain with 12 locations in London, benefited from tax relief during the COVID-19 pandemic. However, he warned those currently planning to start a business that they "must work hard in the new business tax environment," adding, "You won't be able to grow as quickly as we did."

He said, "It's hard to understand how Hunt thinks it's reasonable to only help pubs and not other businesses. Is it simply because pubs have more political clout?"

A spokesperson said the government is helping catering businesses through a £4.3 billion (approximately S$7.5 billion) aid package, which includes setting a corporate tax cap at 25%, simplifying red tape, and addressing the rising cost of living.

Julian Metcalfe, co-founder of Pret A Manger Ltd. and Itsu Ltd., said in an interview, "We used to hire staff, provide jobs, and bring vitality and positivity. But business taxes keep rising, endlessly, and we have to pay them – it's a nightmare."

John Vincent, owner of the fast-food chain Leon, also announced layoffs and store closures due to the heavy tax burden. He hopes the government will provide support to the entire catering industry, not just pubs, otherwise he may have to close more stores. He stated bluntly that the restaurant industry is at a "critical turning point created entirely by the government."

According to a UK restaurant industry lobbying group, the Labour government's two budgets have imposed an additional £7 billion in costs on the entire industry, mainly due to tax increases; nearly 200,000 jobs have been lost since the 2024 general election, and another 100,000 jobs could be lost if business taxes are raised as planned.