Restaurants warn of price rises after national insurance increase

A London restaurateur has warned the rise in employers’ National Insurance Contributions (NIC) next year will make it “nearly impossible” to operate in the next 18 months.

Mandy Yin, chef and owner of Sambal Shiok on Holloway Road, wrote on Instagram that she would likely have to raise prices by 6.5% in April “just to maintain the status quo”.

Yin wrote: “Independent hospitality has been operating in survival mode since Covid. I have given up on any dreams of growth and am just focused on breaking even on my one site from month to month. 

“Pre-Covid profits used to be around 15-20%. Now they are a razor-thin 3% at best, with any profit one month likely to being wiped out by disappointing sales the next month. Sales are completely unpredictable now.”

She said good staff were essential to the restaurant, but staffing costs could hit 50% in difficult months, which was “clearly unsustainable”.

Analysis by UKHospitality revealed the increases to employers’ NICs and wages from April 2025 will hit hospitality the hardest, with a 10% rise in the cost of employing a worker, amounting to at least £2,500 per employee.

Last month over 200 hospitality businesses signed a letter to the Chancellor, warning it would force them to cut jobs and close sites.

Operators told The Caterer the tax increases were “not sustainable” and would force them to limit growth and investment.

Alan Morgan, chief executive of Bella Italia, Cafe Rouge and Las Iguanas operator Big Table Group, said the business was reviewing “staffing levels, capital investment and customer pricing” due to the rises.

Chef Tom Kerridge told Sky News last week there would be a “huge amount of closures” due to tax increases on businesses.

“We’ve already got high-profile names and Michelin-star restaurants that have decided to shut their doors. And when that starts to happen, it does begin to filter down,” he said.

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