Pep Guardiola 'forced' to close restaurant after Rachel Reeves's £26bn tax raid 'increases costs'

In a statement, the business cited “exceptionally challenging trading conditions and increased costs” as the reasons behind the decision. The restaurant has been co-owned by the Manchester City manager since it opened in 2018.

During its operation, Tast Catala became a regular venue for Mr Guardiola to host players and senior figures connected to the club.

The closure comes amid growing concern within the hospitality sector about rising costs and changes to business taxation, following Rachel Reeves's record £26billion tax raid.

Industry groups have warned that recent Budget measures have increased financial pressure on restaurants, pubs and cafés across the UK.

Tast Catala was founded by Mr Guardiola alongside Manchester City chief executive Ferran Soriano and former director of football Txiki Begiristain.

The trio partnered with chef Paco Pérez to lead the kitchen at the Manchester venue. Mr Pérez holds five Michelin stars across his restaurants and is known for Catalonian-inspired cuisine.

He grew up working in his parents’ tapas bar and later built an international reputation in fine dining. The restaurant operated across three floors and could seat up to 120 diners.

It featured a ground-floor bar and casual dining space. The first floor housed a more formal restaurant. Private dining rooms and tasting menu experiences were located on the upper level.

The menu included high-end dishes inspired by Catalonian cooking. Among the offerings was squid ink rice priced at £43.

The restaurant attracted a number of high-profile football figures during its time in Manchester.

Visitors included Arsenal manager Mikel Arteta, Manchester City striker Erling Haaland and former City players Kevin De Bruyne and Fernandinho. The project was launched by restaurant group Fazenda, which aimed to bring regional Spanish cuisine to the city.

The closure comes as hospitality businesses warn of sharp increases in business rates. UKHospitality has said venues could face average rises of 76 per cent under planned changes.

The trade body has warned that hundreds of businesses could be forced to close as a result.

Allen Simpson, the chief executive of UKHospitality, said: "This is yet another example of how cost pressures are forcing venues to take the hard decision to close for good."

Mr Simpson said: "Successive Budgets have dramatically increased the cost of employment and will soon send business rates soaring. This will accelerate business closures and job losses."

UKHospitality has called on ministers to increase the hospitality business rates discount to the maximum 20p threshold.The group said this would help prevent significant increases coming into effect in April.

The wider hospitality sector is also facing higher labour costs, rising energy bills and reduced consumer spending. UKHospitality estimates recent Budget measures will cost the industry an additional £1.4billion.

According to the organisation, the changes could also discourage businesses from employing younger workers.

Shadow business secretary Andrew Griffith criticised the Budget’s impact long-term on hospitality businesses operating in the UK.

Mr Griffith said: "The Chancellor’s latest Budget was another own goal for pubs and restaurants."

He said businesses were already dealing with higher wage costs before changes to business rates were announced. Conservative MP Alan Mak also criticised the removal of previous business rates support.

Mr Mak said his party had reduced business rates for hospitality venues during and after the pandemic. He described the withdrawal of that support as “disgraceful and damaging our hospitality sector and high streets”.

The British Beer and Pub Association has reported that 2,000 pubs have closed over the past five years. It said new business rates could push more venues to the brink.

Some pubs are expected to see their annual bills rise by as much as £6,000. More than 250 pubs have joined the Taxed Out campaign in response to the changes.

Participating venues have barred Labour MPs in protest at rising business rates. Tast Catala will serve its final customers on Saturday before closing its doors permanently.