The hospitality sector is in 'survival mode' after Labour tax rises and the Iran war chaos have left the industry on the brink - with one hotelier claiming it 'feels like I'm working for Rachel Reeves.'Surging energy prices caused by the Strait of Hormuz fiasco and Labour tax hikes have left profit margins at a minimum and businesses in the UK at breaking point.The conflict in Iran has driven up oil and gas prices smacking businesses with tens of thousands in higher costs per week, while a record 64 per cent of small firms said taxation is now their biggest cost pressure, according to the Federation of Small Businesses. Hoteliers told the Mail how both rising fuel prices and taxes have pushed the hospitality sector to the verge of a crisis.Shaun Whitehouse, the co-owner of Lanes Hotel, a luxury boutique spa and hotel in Somerset, said rising fuel costs 'make it nigh on impossible' for businesses in the hospitality sector to break even.'It has been incredibly difficult mainly because of the price rises combined with the tax increases,' he said.'The chancellor has increased taxation and reduced the discount on business rates so when we get a shock like this one with the fuel increases it is impossible to absorb it because we have been pushed to the limit already.'Mr Whitehouse - who has worked in the sector for 45 years - said working in the sector is 'tougher now than it's ever been.' Shaun Whitehouse, the co-owner of Lanes Hotel, a luxury boutique spa and hotel in Somerset said working in the hospitality industry is 'tougher now than it has ever been' Mr Whitehouse said after working the busy May bank holiday weekend, 'it feels like you're working for the Chancellor' Rachel Reeves The co-owner of Lanes Hotel in Somerset said rising fuel costs 'make it nigh on impossible' for hospitality businesses to break evenHe said: 'When I speak to colleagues and other hotel owners they are all saying the same thing - survival mode, survival mode.'We have just had one of the busiest weekends here but you just feel like you're working for the Chancellor.'You pay your staff and your suppliers and then the taxman, then there's nothing left over. You go from breaking even to making a loss.'During the May bank holiday weekend, the hotelier worked 'seventeen-hour days which is galling' given the financial pressures the sector is experiencing, some of which are unavoidable.The hotel's rates for business travellers are negotiated a year in advance meaning price increases are hit head-on. Despite the challenges Lanes Hotel faces, customers have been more understanding than ever.'A lot of the customers really do get it, particularly business customers. They really understand how tough it is for the hospitality sector in the UK. There's a lot of sympathy,' he said.But businesses closing their doors remains a brutal reminder that price increases are making it impossible to survive, Mr Whitehouse said.'Ten years ago there were ten licensed places open in the area, but now we're down to two.' Fellow hotelier, Damon Reynolds, said the industry is 'in a perfect storm of energy price rises and various taxation' Mr Reynolds has owned The Shoregate alongside his husband Nicholas since 2019. They opened their doors in 2022 after a three year renovation The Shoregate is a boutique hotel located on the east coast of Scotland in Crail, Fife. The hotel received a Michelin listing last monthJoin the discussionIs the government doing enough to protect small businesses from soaring costs and taxes?What's your view?Official figures show that 2,085 businesses collapsed in April, the highest since June 2024, which took the total number of firms going under to nearly 8,000 in 2026.Damon Reynolds, co-owner of The Shoregate, a boutique hotel in Crail, Fife, said hearing about so many businesses shutting their doors in one month is 'tragic and depressing.'He said: 'Hospitality is being hit on every side with really strong headwinds. Every small business has always said it's difficult but we seem to be in a perfect storm of energy price rises and various taxation.'The main issue is governments and councils are giving with one hand with initiatives and taking away with the other. Unfortunately they are taking more than they are giving.'Mr Reynolds said governments of all stripes, including the predecessors and current government, have 'largely ignored the hospitality industry.' 'Every hospitality business is on its knees and we are just about keeping our head above the water.'The hotel - which has ten full-time staff and makes about £700,000 a year - is run by Mr Reynolds and his husband Nicholas.Together they purchased the run-down pub on the east coast of Scotland in 2019 and spent three years restoring it, finally opening the doors in 2022.The following four years since starting their bespoke hotel business has been a 'steep learning curve.'Mr Reynolds said: 'We always knew it was going to be challenging, but we also got our Michelin listing last month.'Fortunately, The Shoregate also has a 'fantastic community that supports us and keeps us in the black.'Crail is one of the remaining few villages in the UK that still has a variety of traditional amenities including a butchers, a bakery and a grocers, Mr Reynolds claimed.Rather than letting businesses close, he said: 'the country should be doing everything they can to encourage small businesses and entrepreneurs to do the best they can.'Tina McKenzie, the Policy Chair for the Federation of Small Businesses (FSB) said that the Iran war has impacted almost every business and has played 'a notable role in driving inflation higher'.She said that the 30 and 20 per cent price increase in diesel and petrol since the start of the war has leaped fuel 'upward as a cause for concern for small firms.' 'These hikes are hard for any business to cope with, especially after hefty cost increases across the board for small firms that hit in April across energy, employment and business rates.'And although the government's cancellation of the impending duty hike is a welcome relief, it is not enough, she said.'Small businesses want to see a response from the Government to address the sustained high price while the conflict continues'. Namely, an emergency temporary 5p fuel duty cut for the duration of the higher prices which she said would give consumer and businesses alike a lift.But fuel prices aren't the only issue giving small businesses headaches, she said.'Last month saw standing charges rise for business users by 44% on average, while business rates were also hiked for too many of the small firms that make our high streets and local areas vibrant and welcoming.'Due to rising business costs, small firms are also being deterred from hiring new staff, especially in the hospitality sector, which offers employment opportunities for those new to the workplace. A HM Treasury spokesperson said: 'We have the right economic plan - we're backing the high street by reforming business rates, with a £4.3bn support package to limit bill rises, capping Corporation Tax at 25%, cutting red tape and taking action on the cost of living to boost the sector. 'And our Great British Summer Savings scheme not only supports families, but also supports businesses through increased footfall.'