“This is an emergency": industry figures unite to call for VAT reduction
Chefs including Greens’ and Sunday Brunch presenter Simon Rimmer, the Great British Menu and Eat Well MCR’s Mary-Ellen McTague, Sam Grainger from Madre and Belzan, and Michael Clay of Elnecot are also among those voicing concern for the sector in a new video campaign.
“This is an emergency for hospitality. Brexit meant a lot of floating labour left the industry, heat, light and power, raw ingredients, cost of employing people, increase in rent and rates… in the 33 years that I’ve owned [Greens], this is the biggest crisis I have ever seen,” says Rimmer, whose vegetarian restaurant Greens in Didsbury closed at the beginning of the year after 33 years,
Greens is just one of a number of high-profile closures across the UK in recent months that also include Copper & Ink in Blackheath, run by chef-patron Tony Rodd, Yorkshire bistro The Pig and Whistle, and the original Ceviche restaurant in Soho.
UK has one of highest rates of VAT
The Government temporarily reduced VAT to 12.5% between 1 October 2021 and 31 March 2022, as part of its assistance to the hospitality industry during the pandemic, but it now stands at 20%.
The UK has one of the highest rates of VAT in the world. The US has no VAT just local sales taxes of 2-7%, Canada and UAE have a 5% rate, France is 5.5% and much of Europe is no more than 10%.
A reduction of the VAT rate to 10% is being backed not only by chefs and operators in Manchester, but also by the trade body UK Hospitality, which is backed by over 100,000 hospitality venues in the UK.
UK Hospitality is urging people to contact their MPs to urge them to support a lower rate of VAT for hospitality, tourism and leisure. It also backs the petition at Change.org created by Bournemouth-based hospitality owner Andy Lennox.
“It’s simple. Reducing VAT will undoubtedly save businesses and save jobs,” says Lord.
“We’ve already seen quite a few big closures at the start of this year. We’ll see a lot more in the coming weeks. That’s guaranteed, and something needs to be done. By stepping in and reducing VAT, that’s the single mechanism that can save the industry.”
Research released this week shows that the number of hospitality businesses filing for administration has nearly doubled in two years. The hospitality industry accounted for 12% of administrations in 2023 – the third highest sector in the UK.
A total of 1,641 businesses, 190 of which came from the hospitality industry, filed for administration last year – marking a 22% increase compared to 2022 and 91% rise in comparison to 2021.
“Manchester’s Finest has been working closely with the hospitality sector, championing independent bars, pubs, cafes and restaurants across Greater Manchester for over a decade. On the ground, we hear about the challenges direct from business owners and our team wanted to find a way to support the sector locally and nationally,” says Sophia Crilly, business development director at Manchester’s Finest Group, which produced the video.
“With a platform of almost 3 million social followers, we hope engaging our audience can play a part in effecting real change to support the industry and are proud to lead a campaign calling for 10% VAT now.”
To sign the petition calling for 10% VAT for hospitality, click here.
