UK Chefs Call for 10% VAT Cut for Hospitality Sector to Prevent Further Closures

Leading UK chefs Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan have issued a joint call for the government to halve the VAT rate for the hospitality sector to 10%. They assert that the industry is facing its most challenging period to date, with businesses struggling to remain profitable under the existing 20% VAT.

Hospitality Sector Under Severe Pressure

Simon Rogan, who oversees a restaurant group with nine Michelin stars, stated that businesses are “not making any money whatsoever” and are merely “keeping our heads above water.” Kerridge criticised the government's approach to business taxation, describing it as “very, very wrong.”

Yotam Ottolenghi, proprietor of 11 restaurants, cafes, and delis, labelled the current situation “crippling,” affecting not only his ventures but also smaller bakeries, cafes, and pubs. He highlighted that a substantial portion of every pound earned is consumed by various government taxes.

The appeal follows a prolonged period of adversity for the hospitality sector, from the operational halts during the Covid-19 pandemic to the sharp increase in energy prices attributed to the conflict in Ukraine. These factors, combined with reduced consumer spending amidst the cost of living crisis, have severely impacted margins.

According to UK Hospitality, the industry trade body, three hospitality businesses have ceased operations daily since the beginning of 2026. The UK's 20% VAT rate for hospitality is the second highest in Europe, trailing only Denmark. Industry groups have consistently advocated for a reduction to levels seen in countries such as Germany (7%), Ireland (9%), France (10%), Italy (10%), and Spain (10%).

Government Response and Future Outlook

Cabinet minister Pat McFadden acknowledged that the government has “asked business to contribute more,” while also stating that they “help them where we can.” McFadden noted that tax cut lobbying is a constant feature, but stressed that such measures carry significant costs, requiring the Chancellor to balance these demands against increasing public expenditure.

The chefs, while supporting the rise in the minimum wage, argue that a VAT reduction is crucial for the industry's “survival,” enabling operators to “breathe” and reinvest, rather than solely passing on savings to customers. Pastry chef Ravneet Gill emphasised that profit is not a “dirty thing,” clarifying that earnings are used to “regenerate our areas” and “employ more people,” not for personal extravagance.

Last week, Chancellor Rachel Reeves announced a temporary VAT reduction from 20% to 5% on various attractions and children's meals during the summer holidays. However, Gill dismissed this as a “very poor attempt” that she believes will lead to “loopholes, fraud, misuse and no genuine good.”

The hospitality sector is a significant employer of young people, providing initial work experience for 28% of all 18 to 20-year-olds, according to the Institute of Fiscal Studies. A recent report by former Labour minister Alan Milburn warned that job opportunities for young people are shrinking, risking a “lost generation.” Official figures indicate that over one million young people are currently not in education, employment, or training – the highest level in over 12 years.

Allen Simpson, chief executive of UK Hospitality, reiterated that reducing the cost of employment for businesses is the solution, urging the government to “make it economically beneficial to employ young people once again.” Rogan added that when restaurants face pressure, investment in “youngsters and sustainability” are often the first areas to be cut. Ottolenghi called for a public debate on the societal loss incurred by restaurant closures, fearing a future where social interaction diminishes as people remain at home.