{"id":710818,"date":"2026-01-21T12:38:08","date_gmt":"2026-01-21T12:38:08","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/710818\/"},"modified":"2026-01-21T12:38:08","modified_gmt":"2026-01-21T12:38:08","slug":"uk-businesses-warn-growth-may-be-off-the-menu-after-latest-tax-hike","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/710818\/","title":{"rendered":"UK businesses warn growth may be off the menu after latest tax hike"},"content":{"rendered":"<ul data-testid=\"Summary\" class=\"summary-module__summary__QjADA\">\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Companies in UK&#8217;s hospitality sector say new taxes limiting investment<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Business rates for many to rise from April<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Family businesses affected by inheritance tax changes<\/li>\n<\/ul>\n<p>LONDON, Jan 21 (Reuters) &#8211; Businesses in Britain&#8217;s hospitality sector say new taxes are limiting their capacity to invest, compounding a traditional <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/uk\/uk-needs-tough-action-government-budget-policy-oecd-warns-2025-06-03\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">weakness<\/a> of the economy and undermining the government&#8217;s pledges to revive growth.<\/p>\n<p>Maurice Abboudi owns five Japanese restaurants in London. He told Reuters he had shelved plans for a new site and other investments as any profit he once made is being swallowed up.<\/p>\n<p data-testid=\"promo-box\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__promo-box__hVl8h\"> Sign up  <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/retail-consumer\/britains-rising-business-costs-wipe-growth-off-menu-2026-01-21\/undefined?location=article-paragraph&amp;redirectUrl=%2Fbusiness%2Fretail-consumer%2Fbritains-rising-business-costs-wipe-growth-off-menu-2026-01-21%2F\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">here.<\/a><\/p>\n<p><a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/retail-consumer\/uk-retail-shares-rise-reeves-commercial-property-tax-reforms-2025-11-26\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">Business rates<\/a> &#8211; a property tax on commercial premises &#8211; are due to rise from April and will increase by as much as 115% by 2028\/29 for some companies.<\/p>\n<p>&#8220;It&#8217;s all about survival now rather than growth,&#8221; Abboudi said, adding that his K10 group made a &#8220;very small loss&#8221; last year. &#8220;All we&#8217;re doing is saving money, trying to become more efficient to pay our taxes.&#8221;<\/p>\n<p>Prime Minister Keir Starmer&#8217;s Labour government won power in 2024 vowing to <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/uk\/uks-starmer-outlines-growth-mission-after-budget-tax-rises-2025-11-30\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">grow<\/a> Britain&#8217;s economy, having <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/uk\/fearing-more-taxes-uk-business-issues-warning-government-2025-09-29\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">courted businesses<\/a> big and small for years.But it has introduced billions in new taxes to address public debt and fund services, including increased employment taxes. A higher <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/world-at-work\/uk-government-approves-41-rise-minimum-wage-2026-2025-11-25\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">minimum wage<\/a> has also added to business costs.<\/p>\n<p>&#8220;I honestly cannot think of one single growth policy that they&#8217;ve done for a small business,&#8221; Abboudi told Reuters.<\/p>\n<p>COMPANIES FEEL BETRAYED ON GROWTHBritain&#8217;s economy and real incomes have <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/uk\/uk-economy-grew-by-better-than-expected-03-november-2026-01-15\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">grown slowly<\/a> since the global financial crisis, while Brexit and COVID hit already weak productivity and <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/uk\/uks-reeves-okays-21-billion-transport-projects-outside-london-2025-06-03\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">investment trends<\/a> compared to peers.The pain is acute for some High Street retailers and local pubs, restaurants and hotels. Supermarket giant <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/uk\/britons-cost-of-living-crisis-habits-have-stuck-says-tesco-boss-2025-10-02\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">Tesco<\/a> <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/TSCO.L\" rel=\"noopener\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(TSCO.L), opens new tab<\/a> and Premier Inn owner <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/sustainability\/sustainable-finance-reporting\/premier-inn-owner-whitbread-sees-lower-hit-uk-property-tax-2026-01-13\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">Whitbread<\/a> <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/WTB.L\" rel=\"noopener\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(WTB.L), opens new tab<\/a> are among those who have highlighted the cost of business rates.<\/p>\n<p>According to OECD data, Britain consistently ranks as having one of the highest property tax burdens among developed nations.<\/p>\n<p>While the government often talks about easing regulation, business owners report the opposite, pointing to employment rights legislation, above-inflation minimum wage hikes and new packaging rules.<\/p>\n<p>&#8220;It&#8217;s completely counterintuitive to say that you want the economy to grow but then to put hurdles in front of people,&#8221; said Alex Reilley, executive chair of Loungers, which runs over 300 cafe-bars and restaurants and employs over 10,000 people.<\/p>\n<p>Some angry company owners say the business rates reform falls far short of the sweeping overhaul Labour promised in its election manifesto.<\/p>\n<p>SURVIVAL RATHER THAN GROWTH<\/p>\n<p>Trade group UKHospitality has said 1,000 restaurants, 600 hotels and 500 pubs could close this year as a result of the changes, with pubs facing a 76% average hike over the next three years as pandemic-related reliefs are removed.<\/p>\n<p>Finance minister Rachel Reeves said last week she is working on a support package for pubs, and suggested this could be extended to other hospitality businesses. But she said any further changes to business taxation would need to be done in a &#8220;balanced way&#8221;.<\/p>\n<p>Restaurant visits in Britain are still 21% below pre-pandemic levels, according to data from consumer behaviour company Circana, while those in Germany, Spain, Italy and France have recovered more.<\/p>\n<p>Abboudi said he faces an additional 50,000 pounds of business rates this year, equivalent to a 40% rise, on top of a 150,000 pound increase in 2024 from higher wages and payroll taxes.<\/p>\n<p>The higher minimum wage, which is due to rise 4.1% from this April after a 6.7% rise in 2025, prompted Abboudi to invest in screens for customers to order food at two sites, allowing him to cut staff numbers from 52 to 35.<\/p>\n<p>FAMILY-OWNED BUSINESSES HURT<\/p>\n<p>Some family-owned companies are meanwhile setting aside cash to cover a change in inheritance tax (IHT) rules that mean firms will have to pay the levy when passed to the next generation.<\/p>\n<p>Wernick Group chairman David Wernick said he expects to cut investment by up to 50% over the medium-term, blaming the IHT changes. His family&#8217;s company is Britain&#8217;s largest independent maker and hirer of portable and modular accommodation and employs over 1,000 people.<\/p>\n<p>Most family business owners are driven by a desire to pass something onto the next generation, Wernick said, adding that Reeves&#8217; changes had &#8220;sucked the lifeblood &#8230; out of all of those ambitions.&#8221;<\/p>\n<p>Edward Iliffe, CEO of family-owned Yattendon Group, which spans marinas, newspapers, property, landed estates and a brewery and employs 500 people, said it was delaying investment until it has set aside enough cash to cover its future IHT bill.<\/p>\n<p>Surinder Arora, whose Arora Group operates 20 hotels in Britain and employs 3,000 people, said in total his rates bill will rise 71% to over 29 million pounds.<\/p>\n<p>&#8220;I just hope that this government will look at this and say we need to revisit and we need to see, how can we be competitive,&#8221; he said.<\/p>\n<p>($1 = 0.7427 pounds)<\/p>\n<p data-testid=\"SignOff\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__full_width__kCIGb body-module__extra_small_body__Bfz20 sign-off-module__text__LQAMP\">Reporting by Sarah Young, James Davey and Kate Holton; Editing by Catherine Evans<\/p>\n<p data-testid=\"Body\" dir=\"ltr\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__element__5eCce article-body-module__trust-badge__5mS3f\">Our Standards: <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.thomsonreuters.com\/en\/about-us\/trust-principles.html\" rel=\"noopener\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__medium__2Rl30 text-module__small__sph8i link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n<p><a href=\"https:\/\/www.reutersagency.com\/en\/licensereuterscontent\/?utm_medium=rcom-article-media&amp;utm_campaign=rcom-rcp-lead\" target=\"_blank\" dir=\"ltr\" class=\"button-module__link__A3sD0 button-module__secondary__70gBu button-module__round__QDFgq button-module__w_auto__Sem-F\" data-testid=\"LicenceContentButton\" rel=\"noopener\">Purchase Licensing Rights<\/a><a data-testid=\"AuthorBioImageLink\" class=\"author-bio-module__author-image__jcaG3\" href=\"https:\/\/www.reuters.com\/authors\/sarah-young\/\" referrerpolicy=\"no-referrer-when-downgrade\" tabindex=\"-1\" target=\"_blank\" rel=\"noopener\"><\/a><\/p>\n<p data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__base__o--Cl body-module__extra_small_body__Bfz20 author-bio-module__description__9ynkB\">Sarah reports on UK breaking news, with a focus on British companies. She has been a part of the UK bureau for 12 years covering everything from airlines to energy to the royals, politics and sport. She is a keen open water swimmer. <\/p>\n","protected":false},"excerpt":{"rendered":"Companies in UK&#8217;s hospitality sector say new taxes limiting investment Business rates for many to rise from April&hellip;\n","protected":false},"author":2,"featured_media":710819,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[748,213011,202190,84737,202192,168726,168721,201812,168727,201806,201816,168730,168724,168731,201809,201814,201807,202336,202126,202702,202039,202037,201810,168728,168722,168734,201808,168723,201815,201813,168732,202033,84738,12920,393,105562,84751,205685,3671,2732,124880,210377,4884,10238,5701,84740,168714,1144,124882,168719,207529,207530,111302,205689,205690,204959,712,4566,203994,6094,1200,84744,84729,16,15,1764,84750],"class_list":{"0":"post-710818","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uk","8":"category-united-kingdom","9":"tag-britain","10":"tag-caffs","11":"tag-ccos","12":"tag-cmpny","13":"tag-cycs","14":"tag-destabn","15":"tag-destabx","16":"tag-destafa","17":"tag-destbnx","18":"tag-destcsa","19":"tag-destd","20":"tag-destdnp","21":"tag-deste","22":"tag-destfun","23":"tag-destg","24":"tag-destgns","25":"tag-destlby","26":"tag-destm","27":"tag-destortao","28":"tag-destoukbsm","29":"tag-destoukdnm","30":"tag-destouktpm","31":"tag-destpge","32":"tag-destpsc","33":"tag-destrast","34":"tag-destrbn","35":"tag-destreulb","36":"tag-destrnp","37":"tag-destrws","38":"tag-destrwsa","39":"tag-destucdptest","40":"tag-destuki","41":"tag-eco","42":"tag-emea","43":"tag-england","44":"tag-ents","45":"tag-europ","46":"tag-fdrt","47":"tag-fin","48":"tag-gb","49":"tag-gen","50":"tag-gfin","51":"tag-great-britain","52":"tag-hotels","53":"tag-job","54":"tag-mce","55":"tag-ncyc","56":"tag-northern-ireland","57":"tag-pol","58":"tag-publ","59":"tag-resbr","60":"tag-resbr1","61":"tag-ret","62":"tag-rfod","63":"tag-rfod1","64":"tag-rulesbritain-election","65":"tag-scotland","66":"tag-shop","67":"tag-shopal","68":"tag-stay","69":"tag-tax","70":"tag-topcmb","71":"tag-topnws","72":"tag-uk","73":"tag-united-kingdom","74":"tag-wales","75":"tag-weu"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/710818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=710818"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/710818\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/710819"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=710818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=710818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=710818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}