Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Aberdeen hospitality boss warns of closures after budget tax hikes

Several business owners have spoken after rises to the National Living Wage and National Insurance in today's budget.

Allan Henderson, director of The McGinty's Group.
Allan Henderson, director of The McGinty's Group.

A Granite City hospitality chief says businesses will close after Chancellor Rachel Reeve’s Budget delivered a further “hammer blow” to the industry.

Allan Henderson of The McGinty’s Group says the sector now faces a double whammy  from rising National Insurance contributions (NICs) and a jump in the minimum wage.

He says this is devastating for the sector, which is still in recovery mode after Covid.

“It’s an absolute nonsense to say you are chasing growth and then hammer the businesses that create the growth,” he added.

“This will close businesses. It’s disastrous news for the hospitality industry.

“It comes on the back of  Covid, increased bank rates and energy costs, and minimum wage has gone up by 40% from 2020 and 2025.”

From April, there will be a rise in employers’ national insurance contributions to 15%, with the threshold dropping from £9,100 per year to £5,000.

Meanwhile, the National Living Wage will increase from £11.44 to £12.21.

Mr Henderson, who is helping develop the £50 million Aberdeen Market, says prices will have to go up to help absorb these extra costs.

“But we can’t pass it all onto the customer,” he said. “We will probably have to look at reducing staff and we will have to look at our opening hours and can we afford to be open all these hours?

“I think it’s just a massive blow, especially to businesses that are labour intensive and that’s what the hospitality industry is, because people expect good service when they come to our places.”

Taxes to cost £1m a year

The owner of three Highlands hotels said the cost to his business of the tax increases will be more than £1 million a year.

Stephen Leckie is chief executive of the Crieff Hydro Family of Hotels, which includes Ballachulish Hotel and The Isles of Glencoe Hotel, both near Fort William, and Kingshouse Hotel in Glencoe. In total the group employs around 850 staff.

He said the rise in the minimum wage alone could cost his business around £750,000 a year. The cost of the National Insurance increases will be in excess of £450,000 .

He said: “I certainly don’t argue against the concept of minimum wage. We want to look after our people.

Stephen Leckie, is president of the Scottish Chambers of Commerce.

“However, putting the living wage up by 6.7% when inflation is 2%, it makes it difficult.

“We’re determined to keep investing in our business to make it better but these changes mean we will have to go to the bank and ask to borrow more in the hope that Scotland and the industry has a brighter future financial.”

He added that raising prices to cope with the tax changes, wasn’t an option for all businesses. Mr Leckie said there was a limit people would pay.

He also called for the Scottish Government to follow the UK Government’s 40% business rates relief for eligible retail, hospitality and leisure businesses, up to a cap of £110,000.

‘It’s unfair’

The boss of historic Highland manor house Achnagairn Estate in Kirkhill, Marina Huggett, voiced concerns about how the new measures are expected to help businesses grow.

She said: “There’s a whole raft of additional costs we are going to be saddled with in April as employers .

“This government have said they are going to grow a dynamic economy but so far they have just put on additional costs.

“The estimate is that it’ll add about 10% to operational costs of the business.

Marina Huggett standing outside Achnagairn Estate
Marina Huggett, chairwoman of Achnagairn Estate, believes staying competitive is key to navigating tourism tax. Image: Sandy McCook/DC Thomson

“We are already squeezed and the whole hospitality industry has been squeezed through this budget. It’s just unfair.”

She noted other upcoming pressures including the tourism visitor levy coming in 2026.

“Are we going to be competitive? Are they trying to squeeze the life out of hospitality?

“It’s a lifeblood. It’s our biggest industry and in the Highlands our whole economy is dependent on small businesses.”

Conversation