BRC outlines hospitality's tax burden

Hospitality has the highest effective tax rate of any sector in the UK, according to new analysis from the British Retail Consortium.

The group compared the taxes and profits paid in 11 main sectors of the economy. It found that, combined, hospitality and retail paid a £62 billion in taxes in 2025/26 through business rates, employer National Insurance Contributions (NICs), VAT, and other government taxes.

For every £1 of pre-tax profit made by the sector, hospitality businesses paid the equivalent of 82p in business taxes, while for retail businesses this figure was 72p in the pound. 

These are the highest rates for any sector, well above the 50p average effective tax rate of all 11 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.

Helen Dickinson, Chief Executive at the British Retail Consortium, said: “The Chancellor faces a choice: to continue to pile taxes onto our high streets and the millions of households that rely on them, or to give these businesses the breathing space needed to create jobs, deliver growth, and hold down prices.

“Millions of people rely on retail jobs across the country, but the overwhelming tax burden puts those people at risk, with over 100,000 jobs lost in the last two years.

“For every £1 of pre-tax profit made by retail, the equivalent of 72p is now paid in business taxes. This punishing tax burden has clear consequences: job losses, shuttered shops, and a missed opportunity to drive growth in every postcode.

“For the benefit of high streets, young people and shoppers everywhere, the Chancellor should use the Budget to deliver a clear path to reducing the rates burden, now and in the future.”