In a striking appeal to the UK government, four prominent chefs have called for a significant reduction in Value Added Tax (VAT) for pubs and restaurants, advocating for a drop from the current 20% to 10%. This plea comes as the hospitality sector grapples with unprecedented challenges, signalling an urgent need for governmental intervention to support businesses and foster economic recovery.
Industry Struggles Under Financial Strain
Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan shared their insights during a recent interview with BBC Newsnight, highlighting the dire state of the hospitality industry. They warned that operating in this sector has reached an all-time low, with Rogan stating, “We’re not making any money whatsoever, and we’re just keeping our heads above water.” Such sentiments underscore the financial strain that has become all too common in the industry.
Kerridge echoed this sentiment, criticising the government’s approach to taxation, which he claims is detrimental to business sustainability. “The government is getting taxation on businesses very, very wrong,” he remarked, urging a shift toward more supportive policies.
A Call for Support Amid Rising Costs
The chefs’ call for a VAT cut comes on the heels of a challenging few years marked by the COVID-19 pandemic, spiralling energy prices due to geopolitical tensions, and a cost-of-living crisis that has led customers to tighten their spending, particularly on dining out. According to UK Hospitality, three hospitality businesses are closing their doors every day since the start of 2026, a stark reminder of the relentless pressures facing the sector.
Yotam Ottolenghi, who operates 11 establishments, described the current climate as “crippling,” not just for his ventures, but for the wider network of cafes, bakeries, and pubs struggling to survive. “Every pound that we take, a substantial amount of it just goes to the government for a different taxation,” he noted, highlighting the urgent need for reform.
The Impact of VAT on Business Sustainability
Currently, the UK’s VAT rate is one of the highest in Europe, second only to Denmark. Competitor nations such as Germany (7%), Ireland (9%), France (10%), Italy (10%), and Spain (10%) have lower rates, which UK Hospitality argues gives them a competitive edge. Kerridge stressed that the mounting operational costs, influenced by government policies like increased National Insurance contributions and business rates, are eroding profit margins to a point where price increases are no longer viable without risking customer patronage.
Ravneet Gill, who opened her first restaurant just a year ago, expressed her disbelief at the difficulties she has encountered, particularly regarding employee costs. She voiced concerns that a VAT reduction would not only support current businesses but also help foster new opportunities within the industry.
Government Response and Future Implications
In response to these pressing concerns, Cabinet minister Pat McFadden acknowledged that the government has asked businesses to contribute more, but he emphasised that any tax cuts must be balanced against rising public expenditure demands. He noted that the Chancellor faces numerous competing priorities, making it challenging to accommodate all requests for relief.
Despite recent initiatives, such as a temporary VAT reduction on children’s meals to 5%, Gill dismissed these measures as insufficient, labelling them a “very poor attempt” that could lead to loopholes and misuse.
The hospitality sector is a critical provider of employment for young people, with approximately 28% of 18 to 20-year-olds working in restaurants, cafes, and pubs. However, reports indicate that job opportunities for youth are dwindling, raising alarms about a potential “lost generation.” As the government pledges to create new work placements, industry leaders like Allen Simpson from UK Hospitality argue that reducing employment costs is essential to reversing this trend.
Why it Matters
The hospitality industry is a cornerstone of the UK economy, contributing significantly to employment and community cohesion. Without immediate action to alleviate the financial burdens faced by restaurants and pubs, the country risks losing not only cherished local establishments but also the vibrant social fabric that they help to weave. A VAT cut could provide much-needed relief, allowing businesses to invest in their workforce and reinvigorate the economy at a time when it is needed most.
