Brexit | UK

Insolvencies on the rise

The number of insolvencies in the hospitality business has increased since Brexit. One of the reasons is staff shortage.
IMAGO / Zuma Wire
The number of insolvencies in the hospitality business has increased since Brexit. One of the reasons is staff shortage.

The consequences of Brexit and the rising cost of living are clearly affecting many restaurants in the UK. The number of insolvencies has increased by almost two thirds (64 percent) in the past year, as the accounting firm UHY Hacker Young analysed in a current evaluation. While 856 restaurants filed for bankruptcy in 2020/21 (31 March), 1,406 did so in the following year.

"Restaurants that got halfway through the pandemic thanks to government support are now facing new challenges in the form of rising inflation, post-Brexit staff shortages and diners who simply can't spend as much," UHY partner Peter Kubik said in a statement on Monday.

Smaller restaurants in particular are suffering from no longer being able to easily hire workers from the EU, Kubik said. "Many simply can't find enough employees to operate in a way that keeps them profitable."

Since Brexit, freedom of movement for EU workers in the UK - and vice versa - has come to an end. Now, expensive visas are needed, sponsored by the employer and applied for in an elaborate process.

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