In a letter with over 200 signatories, hospitality bosses last week, external told the chancellor the industry was disproportionately impacted by the “unsustainable” tax hike.

They warned this would “unquestionably” cause closures and job losses.

A number of businesses, including Sainsbury’s, M&S, BT, Wetherspoons, Fullers and JD Sports have also hinted or warned that they may have to pass some of those extra costs on to customers by increasing prices.

But HWS feels it has limited ability to do this as customers may not accept higher prices, the insider told the BBC.

They said that the decision to raise the extra money is not just the result of Budget measures introduced last month.

It is the effect of the changes on top of five difficult years for the restaurant business, following the pandemic, the cost-of-living crisis and labour costs which are already rising.

The advisory firm Interpath has been hired to run the fundraising process, which was first reported by Sky News. Interpath has declined to comment.

The Treasury has also been approached for comment.