A coalition of more than 800 hospitality businesses, backed by prominent chefs such as Heston Blumenthal and Angela Hartnett, has formally requested that Prime Minister Andy Burnham implement a reduction in the sector’s VAT. The open letter, distributed under the #VATsTheProblem campaign, warns that without a shift toward a fairer tax burden, the industry faces an ongoing crisis marked by rising closures, significant job losses, and diminished career prospects for young people.
Signatories to the campaign include major industry players ranging from pub groups like Wetherspoons, Greene King, and Mitchell’s & Butlers to restaurant chains such as Wagamama and Franco Manca. Large hotel operators like Marriott and Best Western, alongside leisure groups including Center Parcs, have also joined the call. However, the campaign emphasizes that the majority of those involved are small and medium-sized enterprises, including independent pubs and hotels.
The plea follows Burnham’s previous stance in February, while serving as mayor of Greater Manchester, where he argued for a VAT rate aligned with European averages to reflect the essential social value these businesses provide to local communities. A petition supporting a 10% rate has already garnered over 370,000 signatures. Although the government provided a £100m aid package during its first week, including a 20% cut to business rates for clubs, pubs, and live music venues, the industry maintains that more substantial intervention is required.
Chef Tom Kerridge, one of the many culinary figures supporting the push, argued that the current 20% VAT rate unfairly penalizes a sector where labor costs are substantial. He noted that while businesses can reclaim VAT on products, they cannot do so on staff members, making the high tax rate particularly difficult to absorb alongside rising energy bills, food prices, and wage pressures.
The letter highlights that a lower VAT rate could prove transformative, potentially converting site closures into new openings and revitalizing high streets. The signatories state that action is needed to prevent further decline and ensure that hospitality remains a viable community asset rather than a struggling sector forced to shed jobs weekly.
Simultaneously, the government has announced plans to support publicans by reviewing the 2016 pubs code to provide greater operational freedom and improved lease terms. Officials are exploring options for long-term relationships between tenants and pub companies. Current provisions allow tenants to move to a “free of tie” arrangement, permitting them to pay market rent and purchase supplies independently, though a government review found that fewer than 400 tenants pursued this path between April 2022 and March 2025, largely due to concerns regarding complexity and cost. The report also notes that kerridge added: “The reality is that 20% VAT is holding hospitality back. The report also notes that but you can’t reclaim VAT on a person, you can reclaim VAT on a product. The report also notes that among the celebrity chefs who signed the letter are Andi Oliver, Clare Smyth, Jason Atherton, Nathan Outlaw, Paul Ainsworth and Tom Kerridge. The report also notes that hospitality is different from many other businesses because so much of what we spend our money on is our teams. The report also notes that with businesses closing their doors every single week.”, we’re seeing the consequences. The report also notes that so they get fairer lease agreements and a better price on beer, following a review into the 2016 pubs code, 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.
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