In an urgent call to action, leading figures in the UK’s culinary scene have urged the government to reduce the value-added tax (VAT) for pubs and restaurants to 10%. The plea comes as the hospitality sector grapples with unprecedented challenges, with prominent chefs including Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan highlighting the dire state of the industry. They warn that without immediate intervention, many establishments could face closure.
The Current State of the Hospitality Industry
During a recent appearance on BBC Newsnight, the renowned chefs expressed their concerns about the mounting pressures on the hospitality sector. Simon Rogan emphasised the financial strain, stating, “We’re not making any money whatsoever, and we’re just keeping our heads above water.” Tom Kerridge added that the government’s taxation policies on businesses are fundamentally flawed, further exacerbating the industry’s struggles.
The hospitality sector has faced a tumultuous few years, starting with the devastating impact of the Covid-19 pandemic, which brought operations to a standstill. The situation worsened with soaring energy prices linked to the ongoing conflict in Ukraine, pushing operational costs to new heights. Compounding these issues, rising living costs have led consumers to tighten their belts, particularly when it comes to dining out. As a result, UK Hospitality reports that three hospitality businesses are failing every day since the beginning of 2026.
The Case for a VAT Reduction
Currently, the standard VAT rate in the UK sits at 20%, the second-highest in Europe, just behind Denmark. This has led industry advocates to call for a reduction to align more closely with rates in other countries, such as Germany (7%), Ireland (9%), and France, Italy, and Spain, all at 10%. Chefs argue that lowering the VAT would alleviate some of the financial burden and allow businesses to reinvest in their operations.
Kerridge, who oversees five restaurants and pubs, pointed out that numerous factors are contributing to rising costs, including increased National Insurance rates, business rates, and minimum wage hikes. He articulated a compelling argument, saying, “It just doesn’t work because it will stop people coming out.” Meanwhile, Ravneet Gill, who opened her first restaurant just a year ago, described the current climate as unexpectedly tough, primarily due to escalating employment costs.
Government Response and Industry Outlook
Cabinet minister Pat McFadden acknowledged the government’s awareness of the pressures on businesses, asserting that while they have requested increased contributions from the sector, they also aim to provide support where possible. Yet, he noted that tax cut requests are frequently made, but each comes with its own financial implications.
The recent announcement of a temporary VAT reduction for certain attractions, specifically children’s meals in restaurants, has been met with skepticism from industry leaders. Gill condemned the move as a “very poor attempt at trying to offer something to hospitality,” predicting it would lead to loopholes and inefficiencies without addressing the root issues.
Employment Opportunities at Risk
The hospitality sector traditionally serves as a vital entry point for young people entering the workforce, employing around 28% of all 18 to 20-year-olds in the UK, according to the Institute of Fiscal Studies. However, a recent report highlighted a worrying trend: job opportunities for youth are dwindling, with over a million young people currently not engaged in education, employment, or training.
In light of this, Treasury minister Torsten Bell noted that employment rates among 18 to 25-year-olds remain consistent since 2024, yet he conceded that high taxation is impacting the sector’s viability. Allen Simpson, chief executive of UK Hospitality, has called for a reduction in employment costs to make hiring young people more economically viable.
Rogan voiced his concerns about the long-term implications of these pressures, stating that when businesses are forced to cut corners, investments in young talent and sustainable practices are often the first casualties. Yotam Ottolenghi echoed this sentiment, advocating for a public dialogue about the broader societal costs of restaurant closures.
Why it Matters
The call for a VAT cut from leading chefs underscores a critical moment for the UK hospitality industry, which plays a significant role not only in the economy but also in social cohesion. As businesses struggle to survive, the potential loss of jobs and opportunities for young people could have lasting repercussions. A reduction in VAT could provide much-needed relief, allowing restaurants and pubs to thrive once more, fostering community engagement and supporting the economy at large. The government’s response will be pivotal in determining the future landscape of this vital sector.
