Playtime’s over? Reeves’s tax raid threatens children’s play centres

The UK’s indoor play industry has warned it faces a “severe financial crisis” following Rachel Reeves’s £40bn Budget tax raid.

The Association of Indoor Play, which represents 1,100 firms including laser parks, leisure centres and “baby sensory” companies, said Rachel Reeves’s fiscal plans threatened “the very core of our industry” and placed many indoor play centres “at risk.”

In a statement, the trade body blamed rising costs associated with increasing minimum wages, higher National Insurance payouts and reduced business rates relief, which it said threatened “the survival of many family-run businesses” still recovering from Covid-19.

Ken Lunn, director of Jack in the Box and finance director of the Association of Indoor Play, said the cost increase from the budget alone would erase 75 per cent of his firm’s net pre-tax profit, “leaving us with almost no capacity to reinvest.”

“We work long hours to support our communities, and our customers are highly resistant to price increases,” he added. “The government says it’s protecting working people, yet as a small business owner working 80 hours a week, I’m left questioning where I fit in.”

The sentiment was echoed by Gordon Foster, Managing Director of Safari Play Venues, who said the anticipated cost increase would reduce profits by up to 35 per cent.

“We’ll need to reduce opening hours and pause all planned capital investments for the next year. Raising prices is an option, but with inflation already so high, there’s a limit to what customers can bear,” he added.

Such a rise in costs would mean price hikes of between 10 to 15 per cent for consumers, just for businesses to break even, the body has added.

The group called on its members to push local MPs to introduce a zero per cent VAT rating on admissions fees for children under 12, as well as inclusion in consultations on reforming business rates.

A HM Treasury spokesperson said: “With our public services crumbling and a £22bn fiscal black hole we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability. This was a once in a Parliament budget to wipe the slate clean.

“And we are protecting small businesses’ business rates bills from inflation and extending 40 per cent relief for 250,000 properties, totalling £1.6bn in relief, and from 2026 we will permanently cut business rates for retail, hospitality and leisure businesses for the first time.”