The VAT’s the Problem campaign, spearheaded by chef and publican Tom Kerridge, argues that reducing VAT could give struggling hospitality businesses some much-needed breathing space while helping to protect jobs and keep our high streets and communities vibrant.
And it is a campaign that we at That’s Food and Drink believe deserves serious consideration and support.
Why 10%?
The standard UK VAT rate is currently 20%, putting British hospitality at a considerable disadvantage compared with businesses in several European countries.
The campaign points out that hospitality VAT is 10% in France, Spain and Italy, while Germany applies a rate as low as 7%. Campaigners want the UK Government to recognise the particular pressures facing hospitality and introduce a permanent 10% rate.
This isn't simply about making life easier for large restaurant or hotel chains.
Independent cafés, family restaurants, pubs, takeaways and other hospitality businesses have been dealing with substantial increases in wages, energy, ingredients, insurance and numerous other operating costs.
When one of these businesses disappears, the effects can reach much further than its owners. Staff lose jobs, suppliers lose customers and communities lose places where people meet and socialise.
Hospitality matters
We sometimes forget just how important our local pubs, cafés and restaurants are.
A café can be somewhere an older person finds companionship. A pub might provide the meeting place for local clubs, charities and fundraising events. Restaurants, hotels and bars provide employment opportunities for young people taking their first steps into working life.
Hospitality also helps make town centres worth visiting.
The VAT’s the Problem campaign argues that reducing VAT would help more venues remain open, protect employment and potentially help businesses keep prices affordable for customers. The campaign says 100,000 hospitality jobs have already disappeared during the past two years.
More than 150,000 people have already backed the campaign
At the time of writing, the campaign website reports that over 150,000 people have signed its petition, although organisers ultimately hope to attract one million signatures.
The campaign also has backing from hospitality organisations including UKHospitality, the British Beer & Pub Association and the British Institute of Innkeeping.
Whether cutting VAT to 10% would ultimately result in lower prices for customers would, of course, depend upon individual businesses. Many operators might instead use the additional margin to absorb rising costs, retain staff, invest in their premises or simply remain viable.
But keeping a favourite pub, restaurant or café open is itself something worth considering.
If you agree that Britain's hospitality businesses deserve a fairer VAT settlement, you can find out more and add your name to the campaign petition at:
VAT’s the Problem – sign the petition!
What do you think? Should VAT for UK hospitality be reduced from 20% to 10%? Would it help save our pubs, cafés and restaurants? Let us know your views.