Celebrity chef Tom Kerridge is spearheading the new #VATsTheProblem campaign, which involves hospitality businesses, high-profile chefs, and sector trade bodies and organisations coming together to call on the government to cut VAT for hospitality firms from 20% to 10%.
Groups supporting it include UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and CODE Hospitality.
The campaign says 10% VAT would significantly help the hospitality sector and bring the UK into line with many other European countries. In Germany, it is 7%, in France, Spain and Italy 10% and in Ireland 9%. The UK has the second highest VAT rate for hospitality in Europe behind Denmark.
Hospitality businesses face increasing costs including minimum wage, National Insurance, energy, food ingredients and business rates. Combined with a reduction in consumer spending, many say they are failing to make a profit and several have been forced to close.
The government has taken steps aimed at reducing the cost pressures, such as extra business rates support for pubs and reduced VAT on children’s meals this summer, but hospitality groups say the measures don’t go far enough.
Discussing the issue on BBC’s Newsnight, chef Simon Rogan said: “We’re not making any money whatsoever, and we’re just keeping our heads above water”, while Kerridge said the government was getting business taxation “very, very wrong”.
Another chef, Yotam Ottolengh, who runs 11 hospitality businesses, said the situation is “crippling” for the sector.
“Every pound that we take, a substantial amount of it just goes to the government for a different taxation,” he added.
Ahead of the #VATsTheProblem campaign officially launching to consumers on 1 July, organisations are encouraging people to sign a petition. At the time of writing over 107,000 signatories have backed it.
In an open letter to the hospitality sector, Kerridge said:
“We know that the key to unleashing hospitality’s potential to grow and thrive into the future comes through a VAT cut. We’re making sure government knows that too, and we need your help.
“We’ve launched a petition, and we’re aiming to get a million signatures supporting a VAT cut to 10% for hospitality.
“Now is the time for hospitality to galvanise behind this campaign. Be part of a movement that aims to get hospitality recognised and taxed in a much fairer way. I know that the Government is listening, but we do need to push hard.”