The UK's hospitality industry is facing an unprecedented crisis, with beloved independent restaurants, pubs, cafes, and hotels disappearing at an alarming rate. Since March 2020, approximately 21 independent businesses have closed every week, and the trend shows no sign of slowing. In London alone, recent casualties include Tandoor Chop House, Da Maria, Club Mexicana, Caravel, Sophie's Steakhouse, Club Gascon, and most Patty & Bun sites. The Italian chain Spaghetti House also shut all its capital locations after 70 years of operation.
The VAT Burden on Hospitality
A key factor driving these closures is the UK's 20% Value Added Tax (VAT) applied to most hospitality services—including restaurant meals, drinks in bars and clubs, coffees in cafes, and hotel stays. This rate is significantly higher than in many European countries: Germany charges just 7% on dining, while France, Italy, and Spain apply 10%. The UK has the second-highest hospitality VAT rate in Europe, surpassed only by Denmark's 25%.
The VAT revenue goes to HMRC and funds public services like the NHS, education, police, and welfare, but critics argue the high rate is suffocating the industry.
The #VATsTheProblem Campaign
Chef Tom Kerridge is spearheading a petition called #VATsTheProblem, urging the government to reduce the hospitality VAT rate to 10%. The petition states: 'Lowering the rate of VAT for hospitality is the single most important thing the Government could do to support our local pubs, restaurants, cafes, hotels, and many more. It would be a huge boost to the great British public, too.'
The campaign aims for one million signatures and is backed by UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping, and CODE Hospitality. So far, over 177,600 people have signed.
What a Lower VAT Rate Would Mean
Reducing VAT to 10% would relieve immediate financial pressure on independent businesses, helping them survive. This would preserve jobs—100,000 have been lost in the last two years alone—and keep beloved local venues open. Lower VAT could also lead to more affordable prices for consumers, including cheaper meals, drinks, and hotel stays. Additionally, it would foster diversity on the high street, preventing the dominance of chain coffee shops and fast-food outlets.
Top Jaw's Jesse Burgess shared a heartfelt plea online: 'If we're not careful, we're going to lose the majority of our independent restaurants, cafes, and bars. Every day, places are just closing down, and there's one thing that could stop it. We are the only European nation that has a 20% VAT rate on hospitality, and it is suffocating the industry, like a full chokehold.'
Andy Burnham, Mayor of Greater Manchester, has also voiced support, stating he would back a 10% VAT rate for hospitality if he becomes prime minister.
To sign the petition, visit vatstheproblem.co.uk.
