The hospitality sector will be hit with a £3.4bn bill for the higher NI when the rise kicks in creating a 15% rate for the majority of employers, with only the smallest businesses excluded. The increase in the rate has been exacerbated by the halving of the threshold limit to £5,000, which brings in many part-time workers, frequently making up much of the workforce in pubs, restaurants and hotels.

Over 200 hospitality businesses represented by UKHospitality, including Fuller’s, Mitchells & Butlers, Whitbread, Wetherspoon and IHG Hotel group, have written to the Chancellor, warning that the rise will result in drastic job cuts and reduced working hours for staff, the closure of small businesses and a reduction in investment plans.