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NTIA says UK night-time businesses facing “bleak” future due to rising costs

By | Published on Wednesday 9 February 2022

Night Time Industries Association

Night-time businesses continue to face an uncertain future, due to rising costs, reduced customer numbers and high levels of debt, according to new stats from the Night Time Industries Association. The organisation says that without further government support, many of these businesses will not survive even as things get back to normal post-COVID.

A survey of 198 NTIA members in England, Scotland and Wales found that nightlife businesses have seen their costs rise by 26% in the last year, while they are operating at an average of 68.9% of their pre-pandemic trading levels.

Many of these businesses have unusually high levels of debt, wracked up while unable to trade during lockdown. And their situation looks even more bleak, due to a raft of new cost increases set to arrive in April.

These include an increase in employer national insurance contributions, an increase in the national living wage, a return to 20% VAT, and an end to the pandemic moratorium on legal action by creditors. There are also proposals to increase taxes on drinks with a high level of alcohol, such as spirits.

Add to this the escalating cost of living crisis in the UK – which will leave people with less to spend on going out – and things do not look too positive, despite the lifting of pandemic restrictions.

The NTIA says that 90% of the businesses surveyed indicated that, due to this combination of different factors, they will not survive without further government support. The main requests are for an extension of the reduced rate of VAT and business rates relief introduced during lockdown, as well as further government grants to ensure the post-pandemic recovery of these businesses.

“These statistics show just how bleak things remain for our sector”, says NTIA CEO Michael Kill. “I think there is a temptation to think that, because it feels as if the pandemic restrictions are now behind us, that nightlife will just snap back to its pre-pandemic strength and everything will be fine”.

“Sadly, this couldn’t be much further from the truth”, he goes on. “We are still running into severe economic headwinds, and April threatens to be a perfect storm for the sector. I would now, even at this late stage, urge the Chancellor to postpone all the tax increases – on National Insurance, VAT and business rates – to give some perfectly viable night time economy businesses a fighting chance of survival”.

“It is unfortunately the case that when you see enormous cost increases of the kind we have felt in our sector, for the vast majority of businesses there is little else they can do other than pass these on to consumers”, he concludes. ”Sadly, what this will mean is people’s well-earned nights out being made considerably more expensive, just when they are themselves struggling with their own cost of living and trying to decide which monthly expenses they can do without”.