UK Chefs Demand 10% VAT Cut for Pubs, Restaurants Amid Mounting Financial Strain
Four prominent UK chefs and restaurant owners have called on the government to halve Value Added Tax (VAT) for pubs and restaurants, asserting that the hospitality sector is facing unprecedented hardship. Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, and Simon Rogan advocate for a 10% VAT rate, bringing the UK in line with many European nations and alleviating pressure on struggling businesses.
Hospitality Sector Under Severe Strain
Simon Rogan, who holds multiple Michelin stars, stated that businesses are merely “keeping our heads above water,” making “no money whatsoever.” Kerridge criticised government taxation policies as “very, very wrong.” Ottolenghi, overseeing eleven establishments, described the situation as “crippling” for a wide range of food businesses.
Cabinet Minister Pat McFadden acknowledged that the government had “asked business to contribute more” and faced constant lobbying for tax reductions. He emphasised that the Chancellor must balance these demands against increasing public expenditure.
The industry has endured a turbulent period, from pandemic-induced closures to soaring energy costs following the conflict in Ukraine. Coupled with a cost of living crisis, customers have significantly reduced discretionary spending on dining out. Industry body UK Hospitality reports that three hospitality businesses have failed daily since the beginning of 2026.
Calls for VAT Reduction and Employment Support
The standard VAT rate in the UK is 20%, the second highest in Europe after Denmark for hospitality businesses. UK Hospitality has consistently argued for a reduction, pointing to lower rates in Germany (7%), Ireland (9%), France (10%), Italy (10%), and Spain (10%).
Kerridge highlighted numerous factors eroding margins, including elevated National Insurance contributions for employers, business rates, and the minimum wage. While supporting the rise in the minimum wage, chefs argue that a VAT cut is essential for “survival” and reinvestment, not merely passing on savings to customers. Pastry chef Ravneet Gill commented that she “never imagined it would be this tough,” particularly concerning employment costs.
A recent government announcement of a VAT reduction from 20% to 5% on certain attractions and children’s meals over the summer holidays was dismissed by Gill as a “very poor attempt” that would lead to “loopholes, fraud, misuse and no genuine good.”
The hospitality industry is a crucial employer for young people, engaging 28% of all 18 to 20-year-olds, according to the Institute of Fiscal Studies. However, a recent report by former Labour minister Alan Milburn warned of shrinking job opportunities for young people, raising concerns about a “lost generation.” Official figures indicate over one million young people are not in education, employment, or training – the highest level in over 12 years.
Allen Simpson, Chief Executive of UK Hospitality, stressed the need to reduce employment costs for businesses, asserting that the government must “make it economically beneficial to employ young people once again.” Rogan noted that investment in youth and sustainability are the first casualties when restaurants face financial duress.
