Nightclubs warn Budget tax hikes could drive venues to ‘brink of closure’
It comes despite a slowdown in nightclub closures over the past year, with a net reduction of 13 venues in 2024.
The UK nightclub sector has warned impending April tax hikes are likely to drive more venues “to the brink of closure”, despite data showing a year-on-year slowdown in nightclub closures in 2024.
The Night Time Industries Association (NTIA), the industry body representing nightclubs and live music venues across the country, reported the number of venues slipped by 13 to 835 at the end of the year.
It came as new openings were more than offset by nightclubs and bars shutting their doors for good.
However, the sector has lost a total of 405 since March 2020, after the Covid-19 pandemic forced stringent lockdown restrictions on venues and heaped pressure on businesses.
Yet chief executive of the NTIA, Michael Kill, has warned worse may still be to come because of upcoming cost increases.
He said: “The uncertainty heading into 2025 is more concerning than anything we saw during the pandemic.”
Concerns come after Labour’s 2024 autumn Budget introduced an increase in employers’ national insurance contributions from 13.8% to 15%, which is expected to raise £25 billion for the Treasury.
The reduced business rates relief is also among fresh pressures imposed by the Budget, alongside an increase to the national minimum wage.
The data found a fall of more than 40% in the number of venues in Wales and Yorkshire since 2020, with numbers in Scotland down 30%.
Nevertheless, the trade body highlighted improvements in the final quarter of the year, branded as the “golden quarter”.
London had a smaller hit over the four-year period from 2020, falling by slightly under 20%.
Despite economic and practical challenges, new additions such as sober raves and using buildings for numerous purposes have helped firms to withstand financial blows.
However, bosses said fears remain ahead of the oncoming tax hikes.
Mr Kill said: “The additional financial burden from the planned tax increases in April 2025 could drive many more businesses to the brink of closure.
“Operators are working on fine margins and many have exhausted all possible avenues to cut costs.
“The long-term strategy rhetoric is important, but there must be a recognition and consideration for the immediate challenges, which are substantial, as we risk further closures and job losses.
“This environment for many is unsustainable.”
