The National Insurance changes unveiled in the Budget will add more than £750 a year to the average cost of employing a team member, leisure operator Hollywood Bowl warned today.
The country’s biggest ten pin bowling alley company said that while it will be ride out the extra burden smaller operators “could be at risk of closure.”
In its latest annual financial results announcement Hollywood Bowl said: ”The recent changes announced by the Government in the Budget to Employers’ National Insurance contributions and threshold levels, coupled with ongoing wage increases will have a significant impact on the hospitality industry.
“It will be felt most keenly by smaller operators across the country for whom the increased costs will be unsustainable and therefore could be at risk of closure. There are likely to be further consequences following the Government changes with potential for higher inflation, and future job creation, and growth investment at risk.
“While we are not immune from these changes, as a bowling business with an average customer frequency of around once a year, significant scale advantages, strong cost culture and a relatively low labour-to-revenue ratio of under 20 per cent in the UK, we are in a better position than many to mitigate the effect of increased costs.”
“The Employers National Insurance cost for an average UK hourly paid team member working 20 hours per week, on national living wage, will increase from just under £400 per annum, to £1,155 per annum. We expect the cost impact to be c. £1.2m on an annualised basis from when the changes are implemented in April 2025.”
In her first Budget in October Rachel Reeves increased the rate of employers’ NI from 13.8% to 15% and reduced the threshold at which it becomes payable from £9,100 to £5,000. The changes will come into effect next April with sectors thast employ large numbers of part-time workers such as hospitality and retail particularly badly hit.
The Chancellor said the reforms would raise up to £25 billion a year which was needed to help close a black-hole in the national finances.
Hollywood Bowl’s total revenues for the year to end September were up 7% at £230.4 million while pre-tax profits fell slightly from £47.5 million to £45 million.
