The 2025 Autumn Budget – What it means for restaurants, and how our industry moves forward

The 2025 Autumn Budget is out and it's a mixed bag for restaurants across the UK.

Some measures will clearly help workers, but other parts will put even more pressure on restaurants that are already struggling. These are tough times for the industry.

Like every restaurant owner, I've also been reading through the fine-print to see what it all means for our hospitality community.

Wage increases – good intentions, but challenging

The big news is that the government is upping the the National Living Wage by 4.1% to £12.71 an hour starting in April 2026.

This is great for staff, who deserve a decent wage for their hard work. However, wage increases aren't the only issue. Since Brexit, it's been increasingly tough to find skilled restaurant workers. Many have left the UK, and it's getting harder to bring in talent from other countries.

Because of this shortage, wages are going up anyway as restaurants compete with each other for the best people. This budget increase makes that problem worse. It's a good idea in principle, but it'll only serve to increase costs for restaurants that are already struggling.

The government needs to make hiring easier, perhaps by rethinking the rules for international workers. Otherwise, just raising wages won't fix the employee shortage.

Costs up, margins down

Wages aren't the only issue. The economy is still on shaky ground:

• Personal tax threshold freezes mean many workers will take home proportionally less, affecting consumer spending power.
• Core inflationary pressures haven’t fully eased.
• Hospitality-specific support, such as targeted VAT relief or business rates reform, was not delivered in any meaningful way.

According to UKHospitality, just wage rises alone will add an estimated £1.4 billion in extra costs to the sector. For independent venues and local restaurants, this is a serious problem.

What’s next for restaurants?

This Budget makes one thing absolutely clear: The restaurants that come through this period strongest will be the ones that focus relentlessly on efficiency, value and smarter use of technology. Rising wages, tighter margins and an unpredictable economy leave very little room for waste or guesswork.

That’s why now is the moment to double-down on the fundamentals, and why tools like Favouritetable are becoming essential, rather than optional. When costs rise, the only way to protect margin is to operate more intelligently, streamline service, and ensure every table delivers value.

Here’s where restaurants should focus:

• Use smart table and shift optimisation to match staffing to real demand, ensuring labour hours are used where they make the most impact.
• Reduce no-shows and late cancellations through deposits, pre-payments or pre-ordering — simple steps that protect revenue instantly.
• Maximise occupancy with better booking flows using tools like Reserve with Google, integrated waitlists, and structured group-booking management.
• Streamline service with automated workflows, reducing manual admin so teams can focus on guests.
• Lean on reporting and data to improve decision-making, eliminate inefficiencies and plan ahead with clarity.

This is exactly where Favouritetable supports operators — helping restaurants run tighter, smarter services while still delivering excellent guest experiences. When every hour, every cover and every table matters, the right technology becomes a genuine commercial advantage.

The Budget also introduced several measures that will directly affect restaurants in the coming years. 

Income tax and National Insurance thresholds will remain frozen for three more years from 2028, meaning more workers will gradually pay more tax as wages rise. This could reduce disposable income and weaken demand for dining out.

Minimum wage rates will increase from April, with 18–20-year-olds rising from £10 to £10.85, and the National Living Wage (21+), will increase from £12.21 to £12.71. This adds further pressure to staffing costs at a time when the sector already faces labour shortages.

Restaurants have always been careful about waste, but now cutting unnecessary cost and inefficiency isn’t just good practice — it’s essential for survival.

There is a glimmer of positive news: Business rates will be permanently lowered for around 750,000 retail, hospitality and leisure businesses, funded by higher rates on large commercial properties. A £4.3bn support package will also help ease the impact on businesses facing steep rates increases.

Our commitment to the hospitality community

At Favouritetable, we help restaurants to be strong, protect their profits, and run smoothly. We're here for restaurants that need tech that works, not fancy extras.

Whether you have one restaurant or many, we want to give you the tools to adapt quickly, stay competitive, and keep giving your guests the great experiences they’ve come to expect.

This budget might not be ideal, but restaurants are good at overcoming problems through creativity and hard work.

With the right setup and smarter operations, restaurants can make it through this challenging time and keep doing well. And, as always, we’re here to support you every step of the way.