Archive · 14 Sep 2026
Hospitality Businesses Urge Britain to Cut VAT Amid Rising Costs
Pubs, restaurants and hotels say it is becoming too expensive to run their businesses.
They want the tax on hospitality sales, called VAT, reduced from 20 per cent to 10 per cent.
More than 800 businesses and industry leaders support the request.
The industry says wages, energy, food, business rates and other costs have all increased.
It also says three hospitality venues are closing every day.
A new visitor levy could make some holidays more expensive and add costs for accommodation businesses.
The government says the levy would let local councils raise and spend money where it is needed.
It also says other support, including business rates relief, is available.
More than 800 hospitality businesses and leaders are calling for VAT to fall from 20 per cent to 10 per cent.
UKHospitality says measures from Labour's first two Budgets have added £6.8bn to businesses' costs.
The industry says three hospitality venues are closing each day and warns of further closures and job losses.
Businesses are also concerned about higher wages, employer National Insurance, business rates and proposed visitor levies.
The government says local authorities should be able to raise funds through visitor levies and points to £4.3bn in business rates support.
- Who
- More than 800 hospitality businesses and leaders, supported by chefs including Tom Kerridge, are calling for a VAT cut; the government is defending its policies.
- What
- The hospitality industry wants VAT on pubs, restaurants, hotels and related businesses reduced from 20 per cent to 10 per cent.
- When
- The campaign follows cost measures announced in Labour's first two Budgets and the 2025 Budget; the article does not give a specific campaign date.
- Where
- Britain, including pubs, restaurants, hotels and other hospitality businesses across the country.
- Why
- The industry says higher wages, employer National Insurance, business rates, energy and food costs, regulation and a proposed visitor levy are threatening businesses, jobs and prices.
Hospitality industry
Government
VAT reduction
Hospitality industry
Businesses say cutting VAT to 10 per cent would help absorb rising labour and operating costs, protect jobs and reduce closures.
Government
The government has not committed to the requested VAT cut; the article says public finances are under pressure and reducing VAT would mean giving up tax revenue.
Visitor levy
Hospitality industry
The industry says the levy could increase holiday costs, damage tourism and investment, and add pressure to accommodation businesses already facing higher costs.
Government
The government says local authorities should be able to raise and reinvest money locally, while consulting on affordability for families and stability for businesses.
Existing support
Hospitality industry
Hospitality leaders argue that existing measures, including business rates relief and proposed pub-sector reforms, have not removed the pressure on businesses.
Government
The government points to its wider support package, including £4.3bn in business rates support and a 20 per cent rates reduction for pubs, clubs and live music venues.
- Requested VAT rate
- 10 per cent, down from the current 20 per cent
- Campaign support
- More than 800 hospitality businesses and industry leaders have signed an open letter
- Estimated cost of Labour's first two Budgets
- UKHospitality estimates £6.8bn in additional business costs
- Reported closures
- The industry says three hospitality venues are closing every day
- Visitor levy estimate
- UKHospitality estimates the levy could add £1.6bn in business costs
- Business rates support
- The government points to a £4.3bn support package for hospitality and retail
- Petition support
- More than 370,000 people have signed the #VATsTheProblem petition