More than 800 hospitality businesses have joined forces to call on the Prime Minister to introduce a lower rate of VAT for the sector.
The businesses have signed an open letter as part of the #VATsTheProblem campaign, urging the Prime Minister to set out plans for reducing hospitality VAT following comments made earlier this year in support of a rate more closely aligned with Europe.
The coalition spans the hospitality industry, from independent pubs, bars, restaurants, cafés and hotels to major operators and celebrity chefs.
Signatories include chefs Andi Oliver, Angela Hartnett, Clare Smyth, Heston Blumenthal, Jason Atherton, Nathan Outlaw, Paul Ainsworth and Tom Kerridge.
Major pub, bar and brewing businesses backing the campaign include Fuller’s, Greene King, Loungers, Marston’s, Mitchells & Butlers, Robinsons Brewery, St Austell Brewery, Stonegate Group, Timothy Taylor’s and Wetherspoon’s.
Restaurant operators including Big Table Group, Bill’s Restaurants, Franco Manca, Pizza Express, Wagamama, Wahaca and Wasabi have also signed, alongside accommodation businesses including Best Western Hotels, Center Parcs, Haven, Marriott International, Parkdean Resorts and PPHE Hotel Group.
However, the vast majority of the more than 800 signatories are small and medium-sized businesses operating venues within their local communities.
The campaign follows comments made by Andy Burnham, then Mayor of Greater Manchester, in February, when he said he would argue for a hospitality VAT rate in line with Europe.
It also follows the Prime Minister’s announcement in his first week in office that business rates would be cut by 20% for pubs, clubs and live music venues.
Campaigners now want the Government to build on that announcement by setting out plans for a lower rate of VAT for the wider hospitality sector.
The letter said: “It’s time for a fairer tax burden for hospitality. Without action, closures will only continue to accelerate, jobs will continue to be lost and opportunities for young people reduced.
“More than 370,000 people have signed the #VATsTheProblem petition calling for a 10% rate of VAT for hospitality, bringing the UK in line with the European average.
“We trust we can count on your support, following your comments in February this year that you would “argue for a VAT rate more consistent with what you find in Europe because of the social value that your businesses bring to places and towns”.
“A lower rate of VAT for hospitality can turn closures into openings, lost jobs into new jobs, and boarded up high streets into thriving centres of community.
“Alongside your policy to reform business rates for the high street, we urge you to bring forward your plans to deliver a lower rate of VAT for hospitality.”
Celebrity chef Tom Kerridge is among those backing the campaign and said the current 20% VAT rate was holding hospitality businesses back.
Tom Kerridge said: “It’s clear that the Prime Minister understands the importance of hospitality, and I was really encouraged to hear him make the case earlier this year for a lower rate of VAT for our sector.
“The reality is that 20% VAT is holding hospitality back. Hospitality is different from many other businesses because so much of what we spend our money on is our teams. You can reclaim VAT on a product, but you can’t reclaim VAT on a person. That makes a 20% rate particularly tough for a sector where labour is one of our biggest costs.
“And this is all happening at a time when businesses are already dealing with rising wages, energy bills, food costs and business rates. We’re seeing the consequences, with businesses closing their doors every single week.
“That’s why hospitality businesses across the country have come together with one simple ask of the Prime Minister: deliver on your pledge and bring hospitality VAT down to 10%, in line with our European neighbours.
“We don’t need another promise. We need action.”
