With thanks to Hussein Ahmad of Viewpoint Partners

We were overwhelmed by the response to our article last week detailing the upcoming changes announced in the 2024 Autumn Budget. As we mentioned, there are many factors – greatest among them the rise in National Insurance (NI), an increased minimum wage, and reduced business rates relief – which will hit the sector hard. With many already feeling the squeeze, operating on wafer-thin margins in an industry shaped by relentless cost pressures, this felt like a brutal blow.

So, how can you weather this storm? The key is preparation. Understanding exactly how these changes will impact your bottom line is the first step to making informed decisions. That’s why we’ve teamed up with hospitality accounts experts Viewpoint Partners to bring you this tool, helping you break down the costs so you can plan for the future with your eyes wide open.

Recap: The Storm on the Horizon

Here’s what’s coming:

• National Insurance (NI): Employer contributions rise from 13.8% to 15%, with the threshold for payments dropping from £9,100 to £5,000. For every employee earning £25,000, you’ll pay an extra £805.80 annually in NI alone.

• Minimum Wage: For over-21s, the National Living Wage increases to £12.21 an hour, a 6.7% jump. A full-time employee on this rate will cost an additional £1,031.58 per year when combined with NI changes.

• Business Rates Relief: Hospitality relief drops from 75% to 40%. A property with a rateable value of £200,000 will see its rates payable rise from £50,000 to £120,000—a staggering £70,000 increase.

These aren’t just numbers—they’re existential threats to many businesses. Predictions suggest closures could spike as operators grapple with these compounding costs. But not all is lost. Preparation can be the difference between staying open and shutting up shop.

Introducing the Budget Calculator Spreadsheet

What Does It Do?

1. NI Cost Analysis: Enter employee salaries to see the exact increase in employer NI contributions.

2. Wage Calculations: Model the impact of new minimum wage rates across different staffing levels.

3. Business Rates Forecasting: Account for reduced relief and calculate your new rates bill.

4. Total Cost Overview: Combine these variables to generate a comprehensive view of your additional expenses.

DOWNLOAD THE CALCULATOR HERE

How to Use It

Using the spreadsheet is simple and effective. Follow these steps:

1. Input Workforce Details: Add employee roles, salaries, and hours worked. Include part-time and full-time positions to get an accurate picture.

2. Add Property Information: Enter the rateable value of your premises to calculate the change in business rates.

3. Explore Scenarios: Adjust variables like staff numbers or property size to see how different factors influence costs.

4. Review Results: Use the totals to identify areas where efficiencies can be made or costs offset.

By automating the calculations, the spreadsheet eliminates guesswork, allowing you to focus on strategy.

Why Planning Matters

The Hospitality industry has certainly faced its share of turbulence – pandemics, energy crises, inflation, produce cost increases – but this latest round of challenges feels different. The structural nature of the changes leaves little room for error. Waiting until costs land on your doorstep is not an option.

The spreadsheet offers a practical way to break down complex variables into actionable insights. Once you understand where the pain points lie, you can start planning solutions, such as:

• Optimizing Operations: Streamline staff schedules, invest in efficiency-boosting technology, or reassess supply chains.
• Adjusting Pricing: Introduce modest price increases while communicating the reasons transparently to customers.
• Enhancing Revenue Streams: Offer promotions, diversify services, or target new customer demographics.

The Bigger Picture

Hussein Ahmad of Viewpoint Partners explains: “Come April this isn’t just an issue for restaurants, it affects every business, including their suppliers. As a result, all other costs will go up too. Hospitality businesses sit at the final point of the supply chain before the consumer, who is the only person who cannot pass the costs on. The consumer ultimately decides whether to accept these costs, and they don’t, it means fewer bookings. Striking the right balance requires deep insight and careful preparation, but it can be achieved.”

While the spreadsheet focuses on immediate cost increases, it also highlights the broader questions every business must answer: How can you remain profitable in an increasingly challenging environment? What investments — whether in automation, energy efficiency, or staff training—will pay dividends down the line? And, critically, how will you communicate these changes to your team and customers? The challenges are significant, but they’re not insurmountable. The businesses that thrive in 2025 will be those that take action today. 

By preparing now, you’re not just responding to the April 2025 changes, you’re future-proofing your business.

Do get in touch with Hussein and the team at Viewpoint Partners if you would like to discuss how they could advise and help your business.