Four prominent chefs in the UK are advocating for a significant reduction in VAT for the hospitality sector, calling on the government to lower the tax rate from 20% to 10%. This proposal comes amidst challenging conditions that have left many in the industry struggling to survive. The chefs, including renowned figures Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan, voiced their concerns during a recent appearance on BBC Newsnight, stating that the current economic climate has made operating restaurants and pubs harder than ever.
A Call for Change in Hospitality Taxation
The chefs articulated their frustrations regarding the financial burdens facing their businesses. Simon Rogan, who holds nine Michelin stars, lamented, “We’re not making any money whatsoever, and we’re just keeping our heads above water.” Tom Kerridge echoed these sentiments, arguing that the government’s taxation policies are misaligned with the realities of running a hospitality business. “The government is getting taxation on businesses very, very wrong,” he said, highlighting the pressing need for reform.
Cabinet minister Pat McFadden acknowledged the government’s awareness of the struggles within the sector but maintained that tax cuts come with considerable costs. He mentioned, “We help them where we can,” while noting that the Chancellor must balance various demands against the government’s rising expenditures.
The Impact of Rising Costs
The hospitality industry has faced a series of setbacks in recent years, beginning with the pandemic that halted trade and followed by soaring energy costs due to geopolitical tensions. Customers, grappling with the cost of living crisis, have also been tightening their purse strings, leading to decreased spending on dining out. According to UK Hospitality, an alarming three hospitality establishments have closed their doors each day since the start of 2026.
VAT, or Value Added Tax, is a charge levied on goods and services, with the current standard rate in the UK set at 20%, one of the highest rates in Europe. The chefs pointed out that in comparison, countries like Germany, Ireland, France, Italy, and Spain have significantly lower rates, often around 10%. This discrepancy places UK businesses at a competitive disadvantage.
The Burden of Employment Costs
Kerridge discussed various factors eroding profit margins in the industry, including increased National Insurance rates for employers and business rates. He argued that businesses can no longer pass these escalating costs onto consumers without risking a decline in customer numbers. “It just doesn’t work because it will stop people coming out,” he explained.
Ravneet Gill, who recently opened her first restaurant, expressed her shock at the difficulties in managing employment costs, revealing, “I never imagined it would be this tough.” Rogan added that while hiring staff is expensive, the burden of VAT is particularly damaging. The chefs collectively believe that reducing VAT would not only aid survival but would enable operators to reinvest in their businesses.
Addressing Youth Employment
The hospitality sector is crucial for young people entering the workforce, employing approximately 28% of 18 to 20-year-olds, according to the Institute of Fiscal Studies. However, a recent report indicated that job opportunities for young people are diminishing, raising concerns about a potential “lost generation.” This report, authored by former Labour minister Alan Milburn, revealed that over a million young individuals are currently not engaged in education, employment, or training, the highest figure in over a decade.
In response, the government has announced plans to create 300,000 work experience and training placements across various sectors, including hospitality. However, Treasury minister Torsten Bell conceded that higher taxation is impacting the ability of hospitality businesses to employ younger workers.
Rogan emphasised that when financial pressures mount, investment in youth training and sustainability initiatives often becomes the first casualty. He, along with Ottolenghi, stressed the need for a public discourse on the implications of restaurant closures and what society risks losing in terms of social interaction and community engagement.
Why it Matters
The plea from these top chefs underscores a broader economic dilemma facing the UK hospitality industry. As rising costs and taxes threaten to stifle growth and employment, the call for a VAT reduction is not just about saving businesses; it’s about preserving a vital sector that fosters community, provides jobs, and contributes significantly to the economy. A supportive tax environment could rejuvenate the industry, enabling it to thrive once again, create jobs, and enhance the dining experience for consumers. The government’s response to this plea could shape the future of hospitality in the UK, influencing not only economic recovery but also the social fabric of communities across the nation.
