Restaurant insolvencies jump by a fifth in Q4 2021

Restaurant insolvencies jumped by a fifth in the last quarter of 2021 reaching 354, compared to 296 in Q3.

Accountancy group UHY Hacker Young has warned the upwards trend could continue as restaurants face challenges on multiple fronts.

The invasion of Ukraine by Russia is already causing dramatic hikes in oil and gas prices, with food price increases likely to follow.

National Insurance and VAT will both increase next month, coinciding with the end of the rent moratorium put in place during the Covid-19 pandemic.

Rising interest rates are also set to make borrowing more expensive as well an increasing the amount due on existing loans.

Peter Kubik, Partner at UHY Hacker Young says: "The restaurant sector has emerged from one crisis only to face an onslaught of other challenges.

"Covid restrictions may have ended but higher loan repayments, National Insurance increases and potentially lower demand as the cost of living crisis starts to bite could see an even greater number insolvencies within the sector.

"Restaurants could at least rely on government support during the worst of the pandemic. Now that these protections have come to an end, they're having to face multiple challenges with zero help.

"Given the enormous pressures the restaurant sector is under, the Government should seriously consider scrapping or at the very least postponing, the Health and Social Care tax."