A coalition of leading chefs and restaurateurs in the UK is appealing to the government to reduce value-added tax (VAT) for restaurants and pubs to 10%, as they express deep concerns over the industry’s sustainability. Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan believe that such a move is essential to alleviate mounting financial pressures on businesses that have been struggling since the onset of the pandemic.
A Call for Relief in Challenging Times
In a recent appearance on BBC Newsnight, the renowned chefs outlined the dire state of the hospitality sector, describing it as “the hardest it has ever been.” Rogan, who operates a group of restaurants known for their Michelin stars, remarked, “We’re not making any money whatsoever, and we’re just keeping our heads above water.” Kerridge chimed in, criticising the government’s current taxation approach, which he argues is misaligned with the realities faced by hospitality businesses today.
The chefs’ plea comes amid a backdrop of increasing operational costs driven by rising energy prices and the lingering effects of the Covid-19 pandemic. The war in Ukraine has exacerbated these issues, with many customers now scaling back their spending, particularly on dining out. According to UK Hospitality, an alarming trend is emerging: three hospitality businesses are closing their doors every day since the beginning of 2026.
VAT and Its Impact on Business Viability
The current standard VAT rate in the UK stands at 20%, one of the highest in Europe, trailing only Denmark. The hospitality sector has long advocated for a reduction to align with lower rates in countries like Germany (7%), Ireland (9%), and France, Italy, and Spain (each at 10%). The chefs argue that slashing VAT would not only ease financial burdens but also allow businesses to reinvest in their operations.
Kerridge pointed out the myriad factors contributing to rising costs, including increased National Insurance contributions, business rates, and the minimum wage. He emphasised that businesses have reached a tipping point where further price hikes are untenable, as they would deter customers from dining out. Gill, who opened her first restaurant just a year ago, expressed disbelief at the challenges she faces, particularly concerning staff costs.
Government’s Response and Broader Implications
Cabinet Minister Pat McFadden acknowledged the government’s ongoing discussions regarding tax cuts but reiterated the complexities involved. He mentioned that the Chancellor must balance these demands with rising government expenditures. Despite this, the chefs remain adamant that a VAT cut from 20% to 10% could provide essential relief, allowing them to focus on survival rather than merely cutting prices.
Chancellor Rachel Reeves recently announced a temporary VAT reduction from 20% to 5% for certain attractions during summer, including children’s meals at restaurants. However, Gill dismissed this initiative as inadequate, labelling it a “very poor attempt” that could lead to loopholes and misuse.
The Future of Young Employment in Hospitality
The hospitality sector is a critical employer for young people, with 28% of all 18 to 20-year-olds working in this field, according to the Institute of Fiscal Studies. Yet, the sector is facing a concerning decline in job opportunities. A report by former Labour minister Alan Milburn warned that the UK risks creating a “lost generation” of young people, highlighting the unprecedented number of over one million youth not engaged in education, employment, or training—the highest in more than a decade.
In response to these challenges, the government announced plans for 300,000 work experience and training placements across various sectors, including hospitality. However, industry leaders like Allen Simpson of UK Hospitality argue that reducing employment costs is vital to making it economically viable for businesses to hire young workers again.
Rogan underscored the importance of supporting young talent and sustainability, noting that these are often the first areas to suffer when restaurants face financial strain. Ottolenghi echoed these sentiments, stressing the necessity for public dialogue about the broader implications of restaurant closures on community interaction and social cohesion.
Why it Matters
The appeal from these top chefs highlights not only the fragility of the UK’s hospitality sector but also the broader economic implications for employment and community engagement. Reducing VAT could serve as a lifeline for struggling businesses, allowing them to thrive while providing essential job opportunities for young people. The outcome of this dialogue between the government and the hospitality industry will be pivotal in shaping the future landscape of dining and social interaction in the UK.
