In a heartfelt plea to the government, four renowned UK chefs have called for a reduction in value added tax (VAT) for restaurants and pubs, highlighting the severe financial strain facing the hospitality industry. Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan have urged authorities to lower VAT to 10%, arguing that such a measure is essential for the survival of businesses amid escalating costs and a challenging economic climate.
Grim Times for the Hospitality Industry
The hospitality sector has faced unprecedented challenges in recent years, grappling with the fallout from the Covid-19 pandemic and subsequent economic pressures, including soaring energy prices exacerbated by the war in Ukraine. In a candid discussion with BBC Newsnight, the chefs painted a stark picture of an industry struggling to maintain profitability. “We’re not making any money whatsoever, and we’re just keeping our heads above water,” Simon Rogan lamented, while Tom Kerridge emphasised that the current taxation framework is fundamentally flawed.
The call for action comes as businesses confront a grim reality: three establishments are closing their doors every day since the start of 2026, according to UK Hospitality. This alarming statistic underscores the urgency for intervention as consumer spending, particularly on dining out, continues to decline amidst a cost-of-living crisis.
VAT: A Heavy Burden on Hospitality
Currently, the standard VAT rate in the UK stands at 20%, one of the highest in Europe, surpassing only Denmark. Such a high rate places UK hospitality businesses at a competitive disadvantage compared to their European counterparts, where VAT rates are significantly lower—Germany (7%), Ireland (9%), France (10%), Italy (10%), and Spain (10%). The chefs argue that reducing VAT would not only alleviate financial pressure on businesses but also allow for reinvestment in staff and services.
Yotam Ottolenghi, who operates 11 venues, described the current tax burden as “crippling,” asserting that a considerable portion of revenue is siphoned off to various forms of taxation. “Every pound that we take, a substantial amount of it just goes to the government,” he explained, accentuating the need for a change.
The Broader Economic Context
The call for a VAT cut comes amid a backdrop of increasing costs driven by government policies, including higher National Insurance contributions, business rates, and rising minimum wage requirements. Kerridge highlighted that the industry has reached a critical juncture where businesses can no longer transfer these costs onto consumers without risking a significant drop in patronage. “It just doesn’t work because it will stop people coming out,” he warned.
Ravneet Gill, a rising talent who opened her first restaurant last year, expressed her shock at the harsh realities of operating in the current climate. Employment costs are proving particularly burdensome, limiting opportunities for young people entering the workforce. The hospitality sector typically provides jobs for a significant portion of young people, employing 28% of individuals aged 18 to 20, according to the Institute of Fiscal Studies.
Addressing Youth Employment Challenges
Concerns about youth employment have been amplified by a recently released report indicating a troubling rise in the number of young people not engaged in education, employment, or training—surpassing one million and marking the highest figure in over a decade. Former Labour minister Alan Milburn, author of the report, warned that the UK risks cultivating a “lost generation.”
In response to these challenges, the government has pledged to create 300,000 work experience and training placements across various sectors, including hospitality. However, Treasury minister Torsten Bell acknowledged the adverse effects of higher taxation on job creation, particularly in the hospitality industry. Allen Simpson, chief executive of UK Hospitality, echoed the sentiment, advocating for measures that would incentivise businesses to hire young people again.
Why it Matters
The push for a VAT reduction from prominent culinary figures highlights the precarious state of the UK hospitality sector, which not only contributes significantly to the economy but also plays a crucial role in youth employment and community engagement. As the industry navigates these tumultuous waters, the government’s response will be vital in shaping the future landscape of hospitality in the UK. Without decisive action, the potential for widespread closures and job losses could lead to a diminished social fabric, reducing opportunities for connection and interaction within communities. The time for a thoughtful and strategic approach to support this vital sector is now.
