Hospitality VAT cut: 800 businesses press Burnham on 10%

A hospitality VAT cut is now the formal ask of more than 800 UK businesses, which have signed an open letter telling Prime Minister Andy Burnham to bring the rate on eating and drinking out down from 20% to 10%.

The letter, published on 14 September under the #VATsTheProblem banner, leans on Burnham's own words. In February, when he was still mayor of Greater Manchester, he said he would argue for a rate closer to those used across Europe. The signatories want to know when the arguing turns into policy.

The list reads like a map of British eating out. Chefs Tom Kerridge, Angela Hartnett, Clare Smyth, Heston Blumenthal, Jason Atherton, Nathan Outlaw, Paul Ainsworth and Andi Oliver sign alongside Wagamama, Wahaca, Pizza Express, Franco Manca, Greene King, Fuller's, JD Wetherspoon and Marriott International. According to The Caterer, most of the names are small and medium-sized operators.

A 10% rate is easy to sign for; the argument is about who pays for the other half.

What the hospitality VAT cut campaign wants

One number: 10%, which the campaign presents as the European average. Launched in June and led by Kerridge, #VATsTheProblem is backed by UKHospitality, the British Beer and Pub Association and the British Institute of Innkeeping. Its petition had 372,096 signatures when the letter went out, Morning Advertiser reported.

Kerridge's argument is about payroll, not plates. You can reclaim VAT on a product, he said, but not on a person, which is why labour-heavy kitchens feel the 20% rate harder than shops do. The letter warns that without action closures will keep accelerating and jobs will keep going. The churn is already on the record: 1,839 UK hospitality sites closed between March and June.

The Treasury's answer: who pays for it

The government has not yet replied to the letter. Its most recent position came in August from James Murray, Financial Secretary to the Treasury, who said a big VAT cut "costs a lot of money" and that anything announced would have to be fully funded. He declined to get ahead of the Budget. Burnham's first concession to the sector went elsewhere: in July he announced a 20% business rates cut for pubs, clubs and music venues from April 2027.

The pressure is also moving sideways. On the same day, UKHospitality chief executive Allen Simpson asked mayors, who are set to gain powers to charge levies on overnight stays, to back 10% VAT before introducing one and to cap any levy at 5%. By his calculation, a Bootle family staying in Manchester could face a tax burden of around 27%, against 14.5% for the same trip to Berlin.

"We don't need another promise. We need action," Kerridge said. The Treasury's reply, so far, is a question about the bill. The answer comes with the autumn Budget.