Hospitality VAT Reduction Campaign
Hundreds of Hospitality Firms Urge Prime Minister Andy Burnham to Cut Sector VAT
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Key Points
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The campaign is backed by a broad mix of businesses, including Greene King, Fuller’s, Mitchells & Butlers and Wetherspoons; restaurant groups such as PizzaExpress and Wagamama; and hotel operators including Marriott and Best Western Hotels. Most signatories are small and medium-sized businesses, including independent pubs and hotels.
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The government has already announced a 20% reduction in business rates for pubs, clubs and live-music venues as part of a £100 million aid package, although the industry is pressing Burnham to go further with VAT reform.
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The VAT campaign comes as ministers prepare to allow regional authorities to impose an uncapped levy on overnight stays, a measure that has prompted additional opposition from hotels and tourism businesses.
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The letter was timed ahead of a Downing Street meeting at which Burnham is expected to discuss the government’s growth strategy with business leaders, as he promotes his administration as a “partner for growth.”
More than 800 UK hospitality businesses are pressing Prime Minister Andy Burnham to cut VAT from 20% to 10% before next month's Budget. The #VATsTheProblem campaign, backed by major chains like Wetherspoons and Marriott plus hundreds of independent pubs and restaurants, argues the tax is strangling an industry already crushed by higher wages, energy costs, and food prices Morning Advertiser.
The sector has shed roughly 100,000 jobs over two years, and business leaders say action—not promises—is needed now. Chef Tom Kerridge and other signatories point out that hospitality cannot reclaim labor costs through VAT, putting them at a disadvantage compared to European competitors paying just 5-10% Boutique Hotelier. Meanwhile, over 370,000 people have signed a supporting petition The Caterer.
Why Hospitality Says 20% VAT Is a Killer
Hospitality operators face a unique problem: they cannot write off labor costs against VAT, unlike manufacturers. This makes the 20% tax rate especially damaging when wage bills are rising fast Boutique Hotelier. Pubs, restaurants, and hotels already squeezed by energy spikes and food inflation say the tax is the final blow pushing venues into closure.
The industry lost roughly 100,000 jobs in the past two years AGCC. Signatories warn that without VAT relief, more closures will follow. They also note that France, Germany, and Spain tax hospitality at 5-10%, giving their businesses a significant cost advantage The Caterer.
Big Chains and Indies Unite Behind One Campaign
The #VATsTheProblem coalition includes household names—Wetherspoons, Greene King, Fuller's, Mitchells & Butlers, PizzaExpress, and Wagamama—as well as hotel brands like Marriott and Best Western Morning Advertiser. But the majority of signatories are small operators: independent pubs, family-run restaurants, and local hotels.
This broad backing signals rare unity across the fractured hospitality world. Over 370,000 members of the public have also signed a petition supporting the VAT cut The Caterer, showing the issue resonates beyond business leaders.
Government Aid Falls Short as New Levies Loom
Burnham's administration has already offered £100 million in relief through a 20% reduction in business rates for pubs, clubs, and live-music venues AGCC. But hospitality leaders say this does not go far enough. They are pointing to Burnham's own past support for aligning UK hospitality VAT with European rates.
Meanwhile, the government is preparing to let regional authorities impose an uncapped levy on overnight stays. Hotels and tourism businesses have protested this move, seeing it as adding another cost on top of the VAT burden Boutique Hotelier. Burnham has warned that tight public finances may limit what the Budget can deliver.
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