800 Hospitality Businesses Urge Prime Minister to Make Good on VAT Pledge

An unprecedented coalition of more than 800 hospitality businesses have come together as part of the #VATs TheProblem campaign to write an open letter to the Prime Minister, urging him to set out how he will introduce a lower rate of VAT for hospitality and deliver on a pledge he made earlier this year.

Signatories to the letter represent the entirety of hospitality, from household names and celebrity chefs to single-site, independent pubs, bars, restaurants, cafes, hotels, tourism and leisure businesses.

Notable names include:
• Celebrity chefs: Andi Oliver, Angela Hartnett, Clare Smyth, Heston Blumenthal, Jason Atherton, Nathan Outlaw, Paul Ainsworth, Tom Kerridge.
• Pubs, bars and brewers: Fuller’s, Greene King, Loungers, Marston’s, Mitchells & Butlers, Robinsons Brewery, St Austell Brewery, Stonegate Group, Timothy Taylor’s, Wetherspoon’s
• Restaurants: Big Table Group, Bill’s Restaurants, Franco Manca, Pizza Express, Wagamama, Wahaca, Wasabi
• Accommodation: Best Western Hotels, Center Parcs, Haven, Marriott International, Parkdean Resorts, PPHE Hotel Group

The vast majority of the signatories are small- and medium-sized businesses that operate venues at the heart of their communities.

The open letter follows comments from Andy Burnham, then Mayor of Greater Manchester, in February, where he said he would argue for a hospitality VAT rate in line with Europe.

It also arrives on the back of the Prime Minister’s welcome announcement to cut business rates by 20% for pubs, clubs and live music venues in his first week in office, and it’s crucial the Government builds on this positivity by setting out a plan for a lower rate of VAT for hospitality.

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.”

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.”