UK hospitality pays 82p in business tax per £1 of pre-tax profit

TLDR

• UK hospitality businesses paid the equivalent of 82p in business taxes for every £1 of pre-tax profit in 2025/26, the British Retail Consortium (BRC) reports. That is the highest rate among the 11 sectors it compared.
• The BRC puts the 11-sector average at 50p and says hospitality's rate rose further in 2026/27. Employer National Insurance rose to 15% in April 2025, and new rates multipliers took effect in England in April 2026.
• An independent hotel can calculate what its employer National Insurance and business rates bills take from pre-tax profit before the Autumn Budget on October 28.

UK hospitality paid the equivalent of 82p in business taxes for every £1 of pre-tax profit in 2025/26. The British Retail Consortium (BRC) published the figure on September 30. Hospitality ranked highest among the 11 sectors compared, ahead of retail at 72p.

The BRC counts business rates, employer National Insurance contributions (NICs), VAT and other government taxes. Its release gives no hotel-only figure, so the 82p describes hospitality as a whole. Employer NICs rose in April 2025, and England's rates multipliers changed in April 2026.

Hospitality carries the highest tax burden of 11 sectors, the BRC says

Economic consultancy Flint Global carried out the analysis for the BRC, according to UKHospitality. The BRC says hospitality's rate rose further in 2026/27.

Hospitality paid 82p. Retail paid 72p, the 11-sector average was 50p, and banking paid 40.5p.

Source: BRC press release, September 30, 2026.

Retail and hospitality together paid £62 billion in 2025/26, the BRC says. It reports that hospitality employment fell by 93,000 over two years. The BRC ties that fall to employment costs added by the 2024 Budget.

Allen Simpson, UKHospitality's chief executive, said "hospitality is vastly overtaxed and has the highest tax burden in the economy." Both organizations are lobbying the Chancellor ahead of the Budget, so the figure comes with an argument attached. The release does not set out how each tax was measured.

Employer National Insurance and the wage floor have both moved up since April 2025

The government raised employer National Insurance (NI) from 13.8% to 15% on April 6, 2025. It also cut the threshold from £9,100 to £5,000. Its policy paper says the £5,000 threshold applies until April 5, 2028. The National Living Wage then rose 4.1% to £12.71 an hour on April 1, 2026.

The wage floor is not a tax, so it sits outside the BRC's list. It still raises the earnings on which employer NI is charged.

Take a full-time employee on £12.71 an hour for 37.5 hours a week, all year. Annual pay comes to about £24,800. Employer NI at 15% above £5,000 adds about £2,970 (our calculation).

England's 2026 rates changes cut multipliers for hotels below £500,000 rateable value

From April 2026, qualifying retail, hospitality and leisure properties in England pay lower multipliers. HM Treasury guidance sets each multiplier 5p below its national equivalent. Hotels and guest houses qualify when they are wholly or mainly used to serve visiting members of the public. The cut covers only properties with a rateable value (the property's assessed value for rates) below £500,000.

Business rates are devolved, so the guidance applies to England only. The government calls the change a permanent tax cut worth nearly £1 billion a year across more than 750,000 properties.

A lower multiplier does not mean a lower bill for every hotel. Earlier HotelScaleUp coverage of business rates shows how revaluation can raise a hotel's bill despite the cut.

The BRC says retail and hospitality still pay a disproportionate share of rates, almost a third of the total. The BRC and UKHospitality want both sectors removed from the high-value multiplier. UKHospitality also wants a larger retail, hospitality and leisure discount and support for businesses hit hardest by the 2026 revaluation.

Three things to do this quarter: size your NI bill, check your rates multiplier, watch the Budget

• Measure employer NICs against profit: Pull the last full year and divide employer NICs by pre-tax profit. The result sits beside the sector's 82p, with one caveat: the BRC's figure also counts VAT and other taxes.
• Check your rates multiplier: A hotel in England can ask its billing authority which multiplier applies at its rateable value. Business rates as a share of pre-tax profit gives a second ratio to track.
• Watch the October 28 Budget: The BRC and UKHospitality want retail and hospitality removed from the high-value multiplier. Chancellor John Healey's first Budget is the next point at which rates or employer costs could change.

The BRC's 82p averages a whole sector, so the figure that matters to a hotel is its own.