Summary
Hospitality has to cough up the highest effective tax rate of any sector in Gloucestershire and the UK, leading to fewer job opportunities for young people, foregone investment and higher prices for punters. That’s the snapshot of new analysis from the British Retail Consortium (BRC) which has cross-compared tax and profit paid across 11 defined sectors of the UK economy.
Details
And talking to key front-line people in Gloucestershire’s hospitality sector this morning, optimism for improvement is in scarce supply amid warnings of a drift that threatens a re-run of 2008’s Great Recession. BRC’s data found that combined hospitality and retail paid £62 BILLION in taxes in 2025/26 through business rates, employer National Insurance Contributions (NICs), VAT, and other government taxes.
And for every £1 of pre-tax profit brought in by the sector, hospitality businesses forked out the equivalent of 82p in business taxes, while for retail businesses this figure came to 72p in the pound. HospitalityUK said: “These are the highest rates for any sector, well above the 50p average effective tax rate of all eleven main sectors of the economy, including the 40.5p tax rate of the banking industry.
Hospitality and retail’s effective tax rates rose further in 2026/27.” High streets are particularly exposed to the impact of rising business taxes, the report warned. “The presence of retail and hospitality businesses are what keep high streets vibrant and job opportunities available.
Related stories
Yet they pay a disproportionate level of business rates relative to other industries and together cover almost a third of the total raised by the tax. The consequence is one in seven high street properties across the country lie empty.” Ahead of the Budget, the BRC and UKHospitality are calling on new Chancellor John Healey to put local communities first and cut the cost burden on these two sectors.
Allen Simpson, UKHospitality CEO, said: “This staggering data proves what we have long been saying: that hospitality is vastly overtaxed and has the highest tax burden in the economy.
“With more than 80% of every pound made going back to the government, it is no surprise that our ability to create jobs, drive growth and regenerate the high street has been severely damaged.” He added: “If the government wants to create jobs and drive growth in every postcode, it needs hospitality and the high street firing on all cylinders.
Hospitality’s tax burden needs to be dramatically reduced.” He said the sector needed an entire hospitality solution to business rates, which the government can achieve by increasing the retail, hospitality and leisure discount and providing support to the businesses hardest hit by the 2026 revaluation – in line with the support recently extended to pubs.
Report source: Punchline Gloucester
