The Night Time Industries Association (NTIA) has warned that the situation could worsen in 2025 due to planned tax increases and the ongoing cost of living crisis.
The NTIA reported the number of nightclubs in the UK has fallen by 32.7% since March 2020. This equates to a loss of 405 venues, with the total number dropping from 1,240 to 835 in November 2024.
The free tenure sector, which consists of independent businesses, has been particularly hard hit, with 348 nightclubs closing. Regions such as Wales and Yorkshire have also seen declines of over 40%.
Cities like Birmingham and Liverpool have been significantly affected, with drops of 38.5% and 31.3% respectively.
Deeply fragile
While some areas, such as London and the north east, experienced a small increase in nightclub activity in late 2024, the overall trend is downwards.
“While we’ve seen some recovery during the Golden Quarter, the reality is that our sector is still deeply fragile,” said NTIA CEO Michael Kill.
The Golden Quarter, which includes Halloween, Christmas, and new year, provided a temporary boost for many nightclubs. However, businesses are facing rising costs across the board, including energy prices, wages, and national insurance contributions (NICs).
Many businesses are now experiencing operational costs that are 30 to 40% higher than pre-pandemic levels.
Kill warned that the planned tax increases in April 2025 could be devastating for the sector. The Government plans to reduce business rates relief and increase duty, employers NIC and wages. This could result in extra costs of between £30,000 and £100,000 for many night-time businesses.
“Operators are working on fine margins, and many have exhausted all possible avenues to cut costs,” said Kill. “The uncertainty heading into 2025 is more concerning than anything we saw during the pandemic.”
Immediate tax relief
The NTIA has called on the Government to introduce tax relief in the Spring Budget to help businesses survive. They argue that the recent reduction in business rates relief, combined with the planned tax hikes, is creating an unsustainable financial burden.
“The Chancellor must step up with considered support to help businesses survive and protect jobs,” Kill said.
“The NTIA is calling for immediate tax relief in the Spring Budget. The Government must prioritise a balanced, proportionate approach that addresses the severe cost challenges businesses in the night-time economy are facing.”
“A VAT cut and other targeted support measures are essential to ensure the survival and recovery of this crucial sector,” an NTIA spokesperson added.
Without Government intervention, the NTIA warns that the UK’s nightclub sector faces further decline, with significant consequences for businesses, employees, and local communities.
