Pubs and restaurants say 20% tax is pushing them under

800 hospitality businesses tell PM: cut VAT to 10%

More than 800 hospitality businesses, from some of Britain's biggest pub and restaurant groups to independent operators and Michelin-starred chefs, have delivered a blunt message to the Prime Minister: cut hospitality VAT from 20% to 10%. With businesses closing, jobs disappearing and another tax on tourists on the way, the industry says the Budget on 28 October is the Government's opportunity to stop talking about the cost of doing business and actually reduce it.

800 HOSPITALITY BUSINESSES DEMAND A VAT CUT

VAT at 20% is crushing pubs, restaurants, hotels and cafés. The sector wants 10%. The Budget on 28 October is the chance to deliver it.

More than 800 hospitality businesses from the UK’s biggest pub chains to Michelin‑starred chefs, and every size of business in the sector, have told the PM in no uncertain terms to get on with cutting their VAT. They say that without a cut from 20% to 10% there will be more closures and job losses on our already beleaguered high streets.

The open letter, signed by JD Wetherspoon, Greene King, Fuller’s, Pizza Express, Wagamama, Marriott, Center Parcs and leading chefs including Tom Kerridge, Heston Blumenthal, Angela Hartnett and Jason Atherton, puts Andy Burnham’s own words back to him.

In February, as mayor of Greater Manchester, he said he would “argue for a VAT rate more consistent with what you find in Europe.”

Now the industry is saying get on and put your VAT money where your mouth is.

Pressure

The intervention lands at a difficult time for the government when everyone is making demands for moves to cut costs to business. The PM admitted last week that “the cost of doing business is too high.” However public finances are tight, leaving “little room for manoeuvre” and ministers have just confirmed plans for an uncapped tourist tax, triggering fresh backlash from hotels and tourism operators who say anything that pushes up costs to customers risks reducing demand and job losses. The sector has already lost 100,000 jobs in two years. More than 370,000 people have signed the #VATsTheProblem petition. Hospitality bosses say VAT at 20% is simply unsustainable.

Vat Outlier

Hospitality VAT rates across Europe are lower with France, Italy and Spain at 10% and Germany at 7%. The UK’s rate is double that of major European competitors, at a time when British hospitality is battling higher energy bills, rising food costs and increased wages.

Labour‑intensive sectors like hospitality feel VAT harder than almost any other industry.

Business Closures

The open letter is direct:

“Without action, closures will only continue to accelerate, jobs will continue to be lost and opportunities for young people reduced.”

Fuller’s chief executive Simon Emeny said cutting VAT to 10% is “critical” to returning the industry to growth. Greene King, Hilton and Wahaca have already backed the campaign.

These are mainstream voices of a sector that employs millions and anchors high streets across the country.

Caution

Since entering Downing Street, Andy Burnham has announced a 20% business rates cut for pubs, clubs and live music venues and signalled that the government could go further on business rates at the 28 October Budget. However, he has been cautious about promising a VAT cut, saying: “I wouldn’t want to promise the earth… the financial outlook is difficult.” Hospitality bosses say the sector won’t survive on partial relief.

Big chains can absorb shocks but small and micro ones can’t. For micro‑hospitality, independent cafés, pubs, restaurants, B&Bs, takeaways, bakeries, food trucks, VAT at 20% is often the difference between staying open or closing, taking on or cutting staff, investing or stagnating, and surviving this winter or going under.

A VAT cut to 10% would boost margins and allow businesses to lower prices or reinvest. That could mean new jobs and young people getting a start in the workforce.

The Killer

More than 800 hospitality businesses, from household names to local independents, are telling the prime minister that VAT at 20% is killing the sector and VAT at 10% could save it.

A lower VAT rate won’t just save pubs, restaurants and hotels. It will save jobs, revive high streets, protect tourism, and turn closures into openings.

The industry has spoken. Now it’s up to the government to decide whether hospitality becomes a growth engine or another casualty of rising costs.