Heart with Smart (HWS), the company that operates Pizza Hut’s restaurants in the United Kingdom, has decided to raise more than £10 million in funding to help the business cope with the financial pressure caused by increased taxation. These steps have been taken after the tax hike announced in last month’s budget.
This fund can be raised through sale of part of the business or new investment from existing investors. This has fueled growing resentment in the business sector. Businesses have warned that increases in National Insurance contributions and the National Living Wage will increase costs for businesses that employ large numbers of low-wage workers.
HWS Company currently operates 140 Pizza Hut restaurants in the United Kingdom. The funds raised will be invested in modern technologies such as touchless table ordering and touch screen ordering kiosks. The company believes the technology will reduce the need for workers, but has no plans to lay off large numbers of employees.
From April 2025, the rate of National Insurance contribution paid by employers will be increased from 13.8% to 15%. In addition, the level at which this contribution applies will drop to £5,000. There will also be a 6.7% increase in the National Living Wage and a further increase for youth aged 18 to 20. These changes are estimated to increase the HWS company’s labor costs by around £4 million, i.e. 14%.
According to HWS, this fundraising isn’t just a result of budget decisions. The restaurant business is already in a challenging position due to the pandemic, rising cost of living and labor costs over the past five years.
More than 200 industrialists have so far written to the finance minister about the financial pressure, saying the “unbearable” tax hike is affecting the industry. They warned that business closures and job cuts were “inevitable” as a result of the move affecting industries. Parliamentary Finance Minister Rachel Reeves has already made it clear that businesses will have to “absorb” this extra cost from profits. Supermarkets Sainsbury’s, M&S, telecoms BT and hotel chain Weathspoon have warned that the extra cost could be passed on to consumers in the form of price hikes.
“Difficult decisions had to be taken to restore economic stability,” a government spokesman said. Meanwhile, HWS has hired Interpath, a consulting firm, to raise funds. However, Interpath has not made any statement in this regard.
The impact of these decisions on business, employee jobs, and consumer spending in the future will be the focus of everyone’s attention.