Soon after taking office, Andy Burnham announced a 20% cut in business rates for pubs, clubs and live music venues. Photograph: Richard Pohle/The Times/PAView image in fullscreenSoon after taking office, Andy Burnham announced a 20% cut in business rates for pubs, clubs and live music venues. Photograph: Richard Pohle/The Times/PAHospitality industry urges Andy Burnham to lay out VAT cut plansMore than 800 businesses ask PM to make good on pledge, or risk more closures and job lossesHundreds of UK hospitality businesses, backed by celebrity chefs including Angela Hartnett and Heston Blumenthal, have asked Andy Burnham to lay out plans to lower VAT for the sector, urging him to make good on his previous pledge.More than 800 businesses have written an open letter to the prime minister as part of the #VATsTheProblem campaign, to warn that without a “fairer tax burden for hospitality”, there will be more closures and job losses, and fewer opportunities for young people.The signatories include pubs, bars and brewers such as Fuller’s, Greene King, Mitchell’s & Butlers and Wetherspoons, along with restaurant groups including Franco Manca, Pizza Express and Wagamama, hotel chains such as Best Western Hotels and Marriott international, along with the leisure groups Center Parcs and Parkdean Resorts. However, most of the signatories are small and medium-sized businesses, including independent, single-site pubs and hotels.Among the celebrity chefs who signed the letter are Andi Oliver, Clare Smyth, Jason Atherton, Nathan Outlaw, Paul Ainsworth and Tom Kerridge.In February, Burnham, then mayor of Greater Manchester, publicly said he would argue for a hospitality VAT rate in line with Europe because of the social value businesses bring to towns.
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.The campaign comes after the prime minister’s announcement to cut business rates by 20% for pubs, clubs and live music venues in his first week in office as part of a £100m aid package – but Burnham immediately faced calls to go further.The letter said: “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.“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.”Kerridge added: “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.”The letter came as the government said it would work closely with publicans to give more options for pub tenants who want greater freedom in running their pubs, so they get fairer lease agreements and a better price on beer, following a review into the 2016 pubs code. Other changes are being considered, including to allow pub companies and tenants to agree to a longer-term relationship.There is an option for tenants to go “free of tie” from their pub company and instead pay market rent and buy products freely from other companies. The review found that between April 2022 and March 2025, fewer than 400 tenants applied for a free of tie agreement, saying they felt deterred by the cost and complexity.Explore more on these topicsHospitality industryAndy BurnhamFood & drink industryPubsTax and spendingRestaurantsTravel & leisurenewsShareReuse this content
