Responding to calls from chef and publican Tom Kerridge for a reduction in VAT, culture secretary Lisa Nandy said: “We are listening and we are not afraid to go away and rethink and try and do things differently.”
‘Only way to save sector’
Kerridge used the programme to argue that cutting VAT from the current 20% rate was “the only way” to save front-line hospitality, pointing to lower rates across much of Europe. He warned that cumulative cost pressures risked “squeezing the life out of hospitality”.
The debate was sparked by independent rural operator Andrew Chapman, who told the panel his business rates bill is set to rise by 41% from April. He said his two village pubs were being “taxed out of existence” following increases in national insurance and rates.
‘Monstrous, catastrophic’
Kerridge said his own pubs were facing average rates rises of 115%, describing the Government’s previously announced 15% discount as “a 15% discount off a 115% rise, which is still a monstrous, catastrophic rise”.
He had previously warned that transitional relief “is just softening the blow, it’s still killing you off in two to three years’ time”.
The exchange comes weeks after the Treasury confirmed a 15% reduction on new business rates bills for pubs from April, alongside a two-year real terms freeze and a review of pub valuation methodology.
Kerridge’s VAT intervention also echoes recent calls from JD Wetherspoon founder Sir Tim Martin, who has urged the sector to unite behind a demand for tax equality with supermarkets, including zero VAT on pub food sales.
While Nandy acknowledged the pressures, saying “I recognise what you’re both saying… I heard it, I get it,” the suggestion that ministers are willing to revisit VAT marks a shift in tone.
With April’s cost increases approaching, the issue of whether temporary relief is sufficient, or whether structural reform such as VAT reduction is required, is likely to remain central to the pub sector debate.
