Key facts
- Major hospitality firms are lobbying the Labour party to reduce VAT from 20% to 10%.
- Companies like JD Wetherspoon, Hilton, and Greene King argue the current VAT rate is uncompetitive and harms job creation.
- The UK's 20% VAT rate for hospitality is among the highest in Europe.
- Campaigners link high VAT to approximately 100,000 job losses in the sector over the past two years.
- Greene King's CEO warned that current cost and tax burdens are unsustainable.
Leaders from prominent hospitality firms are intensifying their campaign to persuade the Labour party to reduce Value Added Tax (VAT) for the sector. Companies including JD Wetherspoon, Fuller’s, Greene King, Hilton, and Wahaca are urging Labour leader Rachel Reeves to cut VAT from the current 20% to 10%.
These businesses argue that the UK's 20% VAT rate on hospitality services is uncompetitive compared to other European nations, where rates are often 10% or lower. They claim this high tax burden is unsustainable, contributing to significant cost pressures and leading to hundreds of thousands of job losses in the industry over the past two years.
Greene King chief executive Nick Mackenzie stated that the current level of taxation is reaching a point where it is unsustainable, potentially forcing the company to reduce investment in training programs. Hilton’s senior vice president, Steve Cassidy, echoed these concerns, highlighting the disadvantage for the UK as a travel destination.
The campaign, known as VAT’s The Problem, is supported by celebrity chef Tom Kerridge, who believes the government is aware of the need for action. Fuller's CEO Simon Emeny described the VAT cut as critical for the sector's return to growth, predicting it would stimulate employment and ultimately increase tax receipts for the Treasury.