Kent landlords are backing calls to halve VAT rates for the hospitality industry to stop it “crucifying” pubs and restaurants.
The plea comes following the launch of the VATsTheProblem campaign spearheaded by high-profile TV chef Tom Kerridge, who is calling for it to be cut from 20% to 10% across the sector.
The Ship Centurion boss, Roland Birks
The UK’s 20% imposed rate is the second highest in Europe behind Denmark, according to UK Hospitality, while in countries such as France, Italy and Spain and elsewhere in the EU, it is 10%.
VAT is added to the goods and services people buy.
Mr Kerridge is fronting the campaign led by UK Hospitality, the trade body representing the sector, and says “the key to unleashing hospitality’s potential to grow and thrive into the future comes through a VAT cut”.
The Michelin-starred chef said: “Our sector is under huge pressure. We know it. We live and breathe it every day.
“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.”
Chef Tom Kerridge
Ahead of its official launch on July 1, campaigners are trying to raise a petition with one million signatures to present to the government – since it launched this week, it has already raised more than 100,000 signatures.
The campaign’s demands have been echoed by Canterbury MP Rosie Duffield, who hosted a discussion with restaurateurs, top chefs such as Thomasina Miers and Matt Tebbutt, hospitality industry leaders and fellow MPs, including Herne Bay and Sandwich’s Sir Roger Gale, in Westminster earlier this week.
On Wednesday, she raised the issue with Sir Keir Starmer during Prime Minister’s Questions in the House of Commons.
She said: “All agree with campaigners such as Andy Lennox that the UK’s rates of 20% VAT and hospitality is killing businesses daily.
“Does the Prime Minister agree that VATs the problem and will he match his candidate in Makerfield’s [Andy Burnham] pledge to slash VAT in line with the rest of the EU?”
When asked to respond, Sir Keir replied: “I recognise the challenges she identifies.
Pubs and the hospitality industry are in desperate need of more significant assistance, chiefs warn. Picture: iStock
“But that is why we are permanently lowering business rates for retail, hospitality and leisure businesses.
“Every pub will get 15% off its new business rates bill and bills will be frozen in real terms for a further two years.
“In relation to VAT, she’ll see we are supporting by cutting VAT on children’s meals in restaurants, particularly over the summer period with the savings that were set out two weeks ago by the Chancellor.”
Ms Duffield later described her former leader’s response as “inadequate” and “not acceptable”.
She added: “I held this event because the sector’s voice must be heard.
“What I heard was an industry on its knees asking for fairness and a lifeline, following so many economic hurdles having been thrown at them all at once. They simply want their businesses to survive at this point.”
MP Rosie Duffield has called for VAT rates to be slashed for pubs and restaurants. Picture: Parliament TV
Ms Duffield is also calling for the VAT cut, along with government support for “viable employment” and tackling rising energy costs.
Sir Roger added: “The industry is facing a financial crisis caused by the increase in National Insurance Charges, increased energy charges, increased costs of food and drink inputs, high business rates and VAT in addition to the prospect of local tourism taxes that will not be ring-fenced for re-investment in tourism.
“The immediate call has to be for a reduction of VAT to European levels in the region of 10%.
“Without serious and urgent action to address these issues many hospitality businesses will not survive the system.”
Pub landlords across Kent have since backed the call for VAT to be halved.
Prime Minister Keir Starmer
Roland Birks, who runs The Ship Centurion in Whitstable, told KentOnline: “Some countries actually pay 5% VAT in Europe, so considering it’s 20% here, then halving it would make a massive difference.
“My VAT bill is about £14,000 a quarter, so if you cut that in half, that’s £7,000, which would go towards wages, hiring, and repairs.
“An amount like that can sometimes be a lifeline for a pub.
“Hearing Keir Starmer talk about business rates – that’s just peanuts, a drop in the ocean and makes no difference. You’re talking £20 or £30 a month for 10 months.
“There’s just no leeway for pubs because every small business earning under £1m is not really taking home much at all.
“So you can’t just take and take and not give anything back.”
The Alfred Arms landlord, Gary Taylor
The standard rate of VAT for pubs and restaurants became 20% in January 2011 under the coalition government between the Conservatives and Liberal Democrats.
However, the industry experienced temporary reductions during the pandemic when it was cut to 5% from July 2020, then raised to 12.5% in October 2021, before finally returning to 20% in April 2022.
Yet, with more than 5,000 hospitality businesses estimated to have been lost in the UK so far this year, Gary Taylor, of The Alfred Arms in Newtown, Ashford, says something needs to give financially.
The 56-year-old said: “Whoever wants to reduce VAT for us to 10%, I’d vote for them as it would make a lot of difference to us.
“We don’t have food here but still pay £2,000 every quarter for it, so over the year it’s about £8,000.
“If that were halved then the bills would obviously come down a lot.
Owner of The White Horse in Charlotte Street, Sittingbourne
“National Insurance isn’t too bad at the moment but that’s only really because we have part-time workers here. But everything as a whole is still extortionate – even our Sky bill is £1,600 a month.”
Debbie Pettit, 62, runs The White Horse, in Charlotte Street, Sittingbourne, and says rates are simply astronomical.
“VAT is crucifying us and the industry,” she said.
“We all feel like we pay too much tax on everything, but it really is with National Insurance, wages, bills and then VAT on everything we purchase too.
“Thankfully, as a pub we’re still doing very well, but I don’t know how pubs are still here in some villages and for those who lease them.
“Labour is supposed to be for the working people but they’re just not.”
Last month, Chancellor Rachel Reeves announced the government would cut VAT to 5% on children’s meals in pubs and restaurants from June 25 until September 1.
To view and sign the petition, visit: www.vatstheproblem.co.uk