Burnham urged to lower hospitality VAT
· science
Hundreds of Hospitality Businesses Call on Burnham to Lower VAT
The Prime Minister’s promise to cut business rates for pubs has been music to the ears of many in the hospitality industry. However, it is only one part of a broader puzzle. As Andy Burnham gathers business leaders at Downing Street this week, hundreds of hospitality businesses are holding him accountable for another key pledge: reducing VAT from 20% to 10%.
The stakes are high, with over 800 businesses – including celebrity chefs and major chains – urging action on the issue. This is not just about numbers; it’s also about the human cost of inaction. Every business closure means lost jobs, reduced opportunities for young people, and a further decline in the vibrancy of our high streets.
Britain’s struggling high streets need more than just lip service to revive them. Since taking office, Burnham has made reviving these areas a key focus, but progress has been slow. The fact that over 370,000 people have signed the #VATsTheProblem petition highlights the scale of public support for this issue.
Hospitality businesses face a unique challenge due to their reliance on skilled staff. While they can reclaim VAT on products, they cannot do so on labor costs. As Tom Kerridge pointed out, wages are rising, energy bills are skyrocketing, and food costs are increasing, making this 20% rate a crippling burden.
The industry’s campaign for a lower VAT rate has been building momentum for months, with trade bodies such as UKHospitality, the British Beer and Pub Association, and Code Hospitality lending their weight to the cause. Burnham needs to deliver on his pledge if he’s serious about reviving Britain’s struggling high streets.
A lower VAT rate could be a game-changer, turning closures into openings and lost jobs into new ones. It’s not just about economic benefits; it’s also about preserving the social fabric of our communities. When high streets are thriving, they’re hubs of community activity that bring people together.
Burnham has a chance to make good on his promise and deliver a VAT rate more in line with European averages. If he succeeds, it could be a significant step towards reviving Britain’s high streets – but if he fails, the consequences will be dire. The clock is ticking for Burnham to prove himself as a champion of British business, rather than just a leader who makes promises.
Reader Views
- DEDr. Elena M. · research scientist
While the push for lower VAT is well-intentioned, I'm concerned that the solution might not address the root cause of the problem: the industry's chronic under-investment in technology and innovation. Many hospitality businesses are still reliant on manual processes, high labor costs, and inefficient supply chains. A lower VAT rate would provide a temporary Band-Aid, but ultimately, it's a sticking plaster over a deeper wound. To truly revive Britain's high streets, we need to see investment in digital transformation and sustainable business models that can withstand economic fluctuations.
- CPCole P. · science writer
The hospitality industry's plea for a lower VAT rate isn't just about numbers – it's also about preserving the character of our high streets. The human cost of inaction is clear: every business closure means lost opportunities for young people and reduced vibrancy. What's less clear, however, is how a 10% VAT rate will be implemented practically. Will businesses face complex rebooking processes or will they need to invest in new software? A clear plan from Burnham would reassure the industry that his promise isn't just a hollow vow.
- TLThe Lab Desk · editorial
While Burnham's promise to cut business rates for pubs is a step in the right direction, let's not forget that reducing VAT from 20% to 10% would be a more significant boon for small independent businesses and local communities. These operators often lack the bargaining power of big chains and are disproportionately affected by rising labor costs, energy bills, and food prices. A lower VAT rate could help level the playing field and support innovation in the sector, but let's not underestimate the bureaucratic hurdles that lie ahead.