Hundreds of hospitality businesses have urged Prime Minister Andy Burnham to reduce the value-added tax (VAT) rate for their sector, calling for it to be lowered from 20% to 10%. More than 800 businesses have written to Burnham, asking him to outline how he plans to implement the change. The letter comes as Burnham prepares to host business leaders at Downing Street to show support for entrepreneurs. He is expected to hold a series of events at No. 10 aimed at positioning his government as a “partner for growth,” offering a stable environment for investment in the UK.
Reviving Britain’s high streets has been a key priority for Burnham since taking office, with promises to give councils more power to restrict vape and betting shops and to cut business rates for pubs. The letter calling for a VAT reduction includes signatures from notable figures in the industry, such as celebrity chefs Heston Blumenthal and Tom Kerridge, as well as well-known restaurants like Bill’s, Franco Manca, Pizza Express, and Wagamama. Pubs, bars, and breweries such as Fuller’s, Greene King, Robinsons Brewery, and Wetherspoon’s have also signed, along with resorts like Center Parcs, Haven, and Marriott International. UKHospitality noted that most of the signatories are small and medium-sized businesses that operate venues central to their local communities.
In their letter, the businesses told Burnham that the current VAT rate is unfair and warned that without action, closures will continue, leading to more job losses and fewer opportunities for young people. A petition calling for a 10% VAT rate for the hospitality sector has gathered over 370,000 signatures, aiming to bring the UK in line with the European average. A lower VAT rate, they argue, could reverse the trend of closures, create new jobs, and revitalize high streets. Alongside Burnham’s plans to reform business rates, the signatories are urging him to move forward with plans to reduce the VAT rate for the hospitality sector.
Tom Kerridge, one of the signatories, said that the 20% VAT rate is holding the hospitality industry back, explaining that the sector is unique because a large portion of its expenses are related to employing staff. While businesses can reclaim VAT on products, they cannot do so on people, making the high rate particularly burdensome. He added that the industry is already struggling with rising wages, energy bills, food costs, and business rates, leading to a growing number of closures. Kerridge urged Burnham to deliver on his pledge to lower the VAT rate to 10%, in line with European standards. He emphasized that the industry is not asking for more promises, but for concrete action. The campaign is backed by major hospitality trade bodies and organizations, including UKHospitality, the British Beer and Pub Association, and the British Institute of Innkeeping.
Hospitality Sector Calls for VAT Reduction as Businesses Urge Government Action
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