Key facts
- Celebrity chef Tom Kerridge is campaigning for a reduction in VAT for the hospitality sector.
- Kerridge stated that successful businesses are not built by accountants or tax experts.
- Tax expert Dan Neidle estimates a VAT cut could cost £12.4bn, potentially funded by tax hikes elsewhere.
- Neidle claims large hospitality firms like McDonald's, Mitchells & Butlers, and Whitbread would benefit most from a VAT cut.
- Kerridge supports incoming Prime Minister Andy Burnham's bid for Labour leadership due to his past support for a hospitality VAT cut.
Celebrity chef Tom Kerridge has asserted that successful restaurants and pubs are not built by accountants, advocating instead for a value-added tax (VAT) reduction for the hospitality industry. Kerridge, who runs the two-Michelin-starred Hand & Flowers pub, is spearheading the 'VAT’s The Problem' campaign, which seeks to align UK hospitality VAT rates with those in France, Italy, and Spain, where the rate is 10 per cent.
However, tax expert Dan Neidle has countered Kerridge's campaign, estimating that such a tax break could cost the government as much as £12.4 billion, necessitating tax increases elsewhere. Neidle also suggested that larger hospitality firms would disproportionately benefit, citing potential savings of £432 million for McDonald's and significant amounts for pub owner Mitchells & Butlers and Premier Inn owner Whitbread.
Kerridge defended his position, arguing that while larger companies would see increased profits, the primary goal is the survival of local pubs. He also expressed support for incoming Prime Minister Andy Burnham's bid for the Labour leadership, citing Burnham's previous indication of support for a hospitality VAT cut. Despite Burnham's team recently pledging to cut business rates for small businesses instead, Kerridge remains confident in securing an open conversation about his proposals.
Kerridge criticized the Treasury for the pressures faced by the UK's hospitality sector, attributing the industry's woes to a disconnect between the Treasury and other government departments. He suggested that outgoing Prime Minister Keir Starmer, with his legal and analytical background, might have been too closely aligned with the Treasury's perspective.