Losses at the top 100 UK restaurant groups increased 112% to £517m last year, rising from reported losses of £269m at the end of last month.

According to UHY Hacker Young, the losses are expected to continue, as restaurants have been forced to shut again because of the latest coronavirus restrictions.

Peter Kubik, partner at UHY Hacker Young said: “These figures reveal how seriously the UK restaurant industry was already struggling pre-pandemic. The most worrying part is the restaurants will be still having to absorb the impacts of lockdowns for weeks or months to come.

“The government has stepped in to help but it’s likely that even more will need to be done – very few industries have been hit as hard as restaurants. At the very least the hospitality VAT cut will almost certainly have to be extended.”

UK Hospitality has urged the government to do more to help the sector by extending the reduced 5% rate of VAT on the sector until the end of 2021 to prevent a wave of redundancies. VAT is scheduled to revert back to 20% at the end of March.

Restaurants have become reliant on home delivery services to generate sales, though they have to pay commissions of up to 35% plus VAT.

Alcohol sales, normally a high-margin offering for restaurants, are much lower through delivery apps.

UHY Hacker Young said restructuring was likely to continue in the restaurant sector, particularly the use of Company Voluntary Arrangements (CVAs) to rebase rental costs.

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