In a powerful appeal to the government, some of the UK’s most renowned chefs have called for a significant reduction in Value Added Tax (VAT) for the hospitality sector, advocating for a decrease from the current 20% to 10%. This plea comes in the wake of escalating challenges faced by restaurants and pubs, which they describe as the most difficult period in recent memory. The chefs warn that the sustainability of numerous establishments is at stake, with many struggling to remain viable.
Industry Leaders Speak Out
Celebrity chefs Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan shared their concerns during a recent appearance on BBC Newsnight. Their message was clear: the current VAT rate is placing an untenable burden on hospitality businesses, which are already grappling with rising costs and reduced consumer spending. “We’re not making any money whatsoever, and we’re just keeping our heads above water,” Rogan remarked, highlighting the dire realities faced by many in the sector.
Kerridge echoed this sentiment, asserting that the government’s taxation policies are fundamentally flawed. He noted, “We’ve reached a peak point where businesses can no longer pass on price increases to customers. It just doesn’t work because it will stop people coming out.”
The Economic Landscape
The hospitality industry has endured severe hardships in recent years, first due to the COVID-19 pandemic, which halted trade, and now as it contends with soaring energy prices linked to the ongoing conflict in Ukraine. The combination of these factors has led to widespread financial strain, with reports indicating that three hospitality businesses are closing their doors every day since the beginning of 2026.
While government initiatives like the “Eat Out to Help Out” scheme provided temporary relief during the pandemic, many establishments are still struggling to recover. A recent analysis from UK Hospitality reveals that the standard VAT rate in the UK is one of the highest in Europe, surpassed only by Denmark. The organisation has long advocated for a VAT reduction to align with more favourable rates observed in Germany (7%), Ireland (9%), France (10%), Italy (10%), and Spain (10%).
Rising Costs and Future Prospects
Kerridge, who operates multiple restaurants and pubs, pointed out that numerous factors contribute to increasing costs, including heightened National Insurance contributions for employers, escalating business rates, and rising minimum wage requirements. Despite acknowledging the necessity of a higher minimum wage, he argued that a VAT cut would enable businesses to invest and thrive rather than merely survive.
Ravneet Gill, a pastry chef who opened her first restaurant just a year ago, expressed disbelief at the current challenges, particularly regarding the costs associated with hiring staff. Both Gill and Rogan have emphasised that the VAT burden is crippling, noting that a significant portion of their earnings is consumed by taxes, leaving little room for reinvestment or growth.
Addressing Youth Employment
The hospitality sector plays a crucial role in providing job opportunities for young people, employing around 28% of individuals aged 18 to 20. However, with a recent report highlighting a decrease in job opportunities for this demographic, there are fears of a “lost generation” emerging. The report indicated that over one million young people are currently not engaged in education, employment, or training—the highest figure in over a decade.
In response, the government announced plans to create 300,000 work placements across various sectors, including hospitality. However, industry leaders argue that reducing employment costs through VAT cuts could incentivise businesses to hire more young people. Rogan noted that when financial pressures mount, investments in youth and sustainable practices often fall by the wayside, further jeopardising the future of the industry.
Why it Matters
The call for a VAT reduction is not merely a plea from the hospitality sector; it reflects broader economic concerns that could impact the livelihoods of countless individuals. As restaurants and pubs continue to face an uphill battle, the potential loss of these establishments would not only deprive communities of vital social hubs but could also exacerbate youth unemployment in an already struggling job market. The government’s response to this crisis will be pivotal in shaping the future of the hospitality industry and the economy at large.
