Hospitality has the highest tax burden in the economy, new data reveals

New analysis highlighted by UKHospitality has found that the hospitality sector faces the highest effective tax burden of any major industry in the UK, with businesses paying the equivalent of 82p in business taxes for every £1 of pre-tax profit.

The figures, based on independent analysis conducted by Flint Global for the British Retail Consortium (BRC), indicate that hospitality businesses carried a significantly heavier tax burden than the average across the UK’s main economic sectors. While the average effective tax rate was reported to be 50p for every £1 of pre-tax profit, hospitality’s rate stood at 82p, ahead of all other sectors examined.

According to the research, hospitality businesses paid an estimated £22.9 billion in taxes during 2025/26 through business rates, employer National Insurance contributions, VAT and other government taxes. Retail and hospitality businesses together contributed £62 billion in taxes over the same period.

UKHospitality said the findings demonstrate the scale of financial pressure facing hospitality operators ahead of the Government’s Autumn Budget. The trade body argues that the current tax environment is constraining investment, limiting job creation and placing additional pressure on high streets and local economies.

The analysis also highlighted the importance of hospitality and retail businesses to town centres, noting that the two sectors account for almost a third of business rates revenue while many high streets continue to experience significant vacancy rates.

In response, UKHospitality and the BRC are calling on the Government to reduce the tax burden on hospitality and retail businesses, including reforms to the business rates system and further support for high street operators.