Top pub and restaurant bosses have warned the chancellor that tax increases in last month’s Budget will “unquestionably” cause closures and job losses.

More than 200 signatories in a letter said the hospitality sector was disproportionately affected by the “unsustainable” increase in the amount employers pay in National Insurance Contributions (NIC).

He adds that businesses “lack the capacity to pass on costs to customers,” which will lead to layoffs and the closure of small firms.

Chancellor Rachel Reeves said National Insurance changes for businesses would generate £25 billion in revenue, which would help fund public services such as the NHS.

From April, the rate employers pay for National Insurance will rise from 13.8% to 15%, and the threshold at which they start paying tax on each employee’s salary will be reduced from £9,100 a year to £5,000.

Those who signed the letter include Kate Nicholls, chief executive of UKHospitality, bosses of pub firms Fuller’s and Stonegate Group, and Premier Inn owner Whitbread.

These are supported by a further 209 businesses across the UK, employing tens of thousands of people.

According to the letter, cost increases will cause businesses to reconsider their investment plans, cut jobs “substantially” and reduce employees’ working hours.

The signatories consequently call for measures to “protect low-income businesses”.

The letter also argues that changes to the NIC threshold are “regressive in their impact on low earners and will impact flexible working practices that many older workers and parents rely on”.

Calling on the government to consider one of two measures to mitigate the impact on businesses, it admits they will come at an “immediate financial cost” but the “loss of growth potential” resulting from inaction “will be significantly more expensive”.

Proposed measures include a new employer NIC band that would apply between £5,000 and £9,100 at a lower rate of 5%, or an exemption for taxpayers working less than 20 hours a week.

But the changes set out in the Budget are estimated to raise around £25bn a year, making it one of the biggest tax-increasing measures in history.

The Chancellor has previously said he is not immune to “criticism” about the move, but argued it would put the public finances on a “firm footing”.