Hundreds of hospitality businesses call on Burnham to lower VAT
More than 800 hospitality businesses have written to the Prime Minister urging him to set out how he will introduce a lower rate of VAT.
The VAT’s The problem campaign has called for the hospitality VAT rate to be reduced from 20% to 10%.
Businesses involved in the campaign have signed a letter urging Andy Burnham to deliver on his public support in February for a lower rate of VAT for hospitality.
The letter comes as Mr Burnham gathers business leaders in Downing Street on Monday to pledge to back entrepreneurs.
The Prime Minister is expected to host a series of events in No 10 aimed at pitching his Government as a “partner for growth” that can offer a stable platform for investment in the UK.
Reviving Britain’s high streets has been a key focus for Mr Burnham since he took over in No 10, promising to give councils new powers to block vape and betting shops and pledging to cut business rates for pubs.
Notable names to sign the letter calling for a VAT cut include celebrity chefs Heston Blumenthal and Tom Kerridge and restaurants Bill’s, Franco Manca, Pizza Express, and Wagamama.
Mr Kerridge said: “20% VAT is holding hospitality back”, adding that the sector “is different from many other businesses because so much of what we spend our money on is our teams”.
Pubs, bars and brewers among the signatories include Fuller’s, Greene King, Robinsons Brewery, and Wetherspoon’s, as well as resorts such as Center Parcs, Haven, and Marriott International.
UKHospitality said the “vast majority of the signatories are small and medium-sized businesses that operate venues at the heart of their communities”.
In the letter, the signatories told Mr Burnham: “It’s time for a fairer tax burden for hospitality. Without action, closures will only continue to accelerate, jobs will continue to be lost and opportunities for young people reduced.
“More than 370,000 people have signed the #VATsTheProblem petition calling for a 10% rate of VAT for hospitality, bringing the UK in line with the European average.
“A lower rate of VAT for hospitality can turn closures into openings, lost jobs into new jobs, and boarded up high streets into thriving centres of community.
“Alongside your policy to reform business rates for the high street, we urge you to bring forward your plans to deliver a lower rate of VAT for hospitality.”
TV chef Mr Kerridge said: “It’s clear that the Prime Minister understands the importance of hospitality, and I was really encouraged to hear him make the case earlier this year for a lower rate of VAT for our sector.
“The reality is that 20% VAT is holding hospitality back.
“Hospitality is different from many other businesses because so much of what we spend our money on is our teams.
“You can reclaim VAT on a product, but you can’t reclaim VAT on a person.
“That makes a 20% rate particularly tough for a sector where labour is one of our biggest costs.
“And this is all happening at a time when businesses are already dealing with rising wages, energy bills, food costs and business rates.
“We’re seeing the consequences, with businesses closing their doors every single week.
“That’s why hospitality businesses across the country have come together with one simple ask of the Prime Minister: deliver on your pledge and bring hospitality VAT down to 10%, in line with our European neighbours.
“We don’t need another promise. We need action.”
The campaign is supported by hospitality trade bodies and organisations, including UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Code Hospitality.
Published: by Radio NewsHub