Hospitality businesses press Burnham for VAT reduction plans

More than 800 UK hospitality businesses and celebrity chefs have signed an open letter calling on Prime Minister Andy Burnham to set out plans for a lower VAT rate for the sector.

The #VATsTheProblem campaign says hospitality businesses face an unfair tax burden and warns that further inaction could accelerate closures, job losses and the loss of opportunities for young people. The campaign says more than 370,000 people have signed a petition calling for a 10% hospitality VAT rate.

The signatories include major pub, restaurant, hotel and leisure groups, as well as small and medium-sized operators. They include Fuller’s, Greene King, Mitchells & Butlers, Wetherspoons, Pizza Express, Wagamama, Marriott International and Best Western Hotels.

Burnham reportedly supported a hospitality VAT rate aligned with European levels in February, when he was mayor of Greater Manchester, citing the sector’s social value to towns. The source material does not indicate that a reduction has been agreed or provide a timetable for any change.

The appeal follows the government’s announcement of a 20% business-rates cut for pubs, clubs and live music venues as part of a £100m aid package. The government has also said it will work with publicans on possible changes to tenancy arrangements after a review of the 2016 pubs code.

That review found fewer than 400 tenants applied for “free of tie” agreements between April 2022 and March 2025. The government is considering measures including longer-term arrangements and greater freedom for tenants to buy products from other suppliers.