OPINION: VAT cut must be #1 priority

The latter isn’t exactly kind to our business because we don’t have televisions but there are many businesses out there that desperately needed a boost from a rather long World Cup and hopefully got it – much deserved.

The good weather is a long-awaited boost too, after a less than sunny start to most of April, May and June, it is great to see people enjoying food and drink outside.

So much has happened since I wrote my last opinion piece that I am not quite sure where to start, but I feel most compelled to start with Tom Kerridge. Tom has done such a great job with his #VATsTheProblem campaign, yet I am sure he must be equally perplexed as I am, that he is only sitting on 300,000 signatures after two whole months of the campaign being out there for the whole of hospitality to see.

Tom alone must have around 1.5m followers on social media and the wider hospitality industry employs circa 3.5m people too and one high-profile member of the pub sector, a certain Mr Jeremy Clarkson has circa 11m followers on Instagram alone. We all need to do more to encourage support for Tom’s campaign, after all, it will have the biggest benefit to our industry and I do mean the whole of hospitality. One million signatures has to be our aim… at least. Please can everyone encourage all their employees and customers to sign the petition and build Tom’s numbers to 1m at least.

Just to underline this, so everyone reading this article fully understands, we are the only country in the whole of Europe to have a 20% VAT charge (the standard rate) on food sales, room sales and, in many cases, drinks sales.

They can employ more people

My local pub (with rooms) in the Republic of Ireland has just had a lowering of VAT in July 2026 so they now pay… wait for it… 9% on pub, restaurant and catering food, hot takeaway food, tea, and coffee. They pay 13.5% on hotel and short-term holiday accommodation and 23% (the standard rate) on alcoholic drinks, soft drinks, bottled water, etc.

I asked my friends over there what it meant to them and they said immediately that they can employ more people, they can afford to use more local businesses to supply them, even though they tend to be more expensive, and it keeps them competitive in the face of the guest/customer.

So take note – staff wages are the biggest cost to any business, made worse by this Government’s employer’s NI lift (a tax for employing people) and are measured as a percentage of sales. Imagine if those sales went up 10% overnight… the wage percentage would drop and would give everyone the breathing space to hire more people and therefore serve customers better and sell more products and, hey presto, turnover builds and the cash VAT we pay increases.

The Government needs to understand the benefits that would unfold and see how we compare to Ireland (and the rest of Europe) on VAT, it needs to realise how a cut would help create jobs and lift turnover while better supporting local business and local endeavour.

I get very frustrated (as you all know) that as an industry when something like #VATsTheProblem is launched certain parts of our sector seem hesitant to get behind a campaign that could mean so much to our livelihoods and the survival and turnaround of the hospitality industry.

I have recently received two emails and keep seeing on Instagram nonsense from Long Live the Local AKA the BBA (still no ‘P’) to encourage me to lobby my MP (who ironically is a Tory!) by email asking the following four areas to be resolved… in the order shown:

• Cut draught beer duty to bring it down to the European average
• Implement the promise to deliver a further 20% discount on business rates for pubs
• Review new regulatory costs; new packaging costs add 4-6p extra on every bottle, wiping out already thin profits
• Look into reviewing VAT obligations on pubs and other hospitality businesses.

VAT cut is the most important thing

I find this soul destroying, frankly. These people supposedly think duty cuts on beer will help pubs most? What are you all doing? We need the VAT cut and everyone needs to realise this is the most important thing. So Long Live the Local please send out Tom’s petition and encourage signatures. Certainly, VAT should be top of your ‘agenda’. For goodness sake, you have put regulatory bottle charges above VAT! Your campaign should be called Long Live the Brewer!

I can’t sign off without mentioning Andy Burnham and his ‘amazing’ business rates cut. I would simply say this… nothing is changing until next April 2027, which actually helps no one right now. If he really cared, he’d have implemented the discount immediately. How do we know that by April next year, the multiples won’t have risen or/and indeed the rates assessments themselves aren’t bigger amounts?

We currently have a 15% discount which followed Rachel ‘Thieves’ and other MPs being barred from their local pubs which replaced our 45% discount. Andy’s ‘discount’ brings our total discount to 35% next April but this is still 10% less than the 45% discount we had up to April this year. So, effectively, we are down 30% all of this year until April 2027 and will be 10% down next year to April 2028.

While this is better than nothing on paper, it is not a guaranteed saving in 2027 and we are paying 30% more this year to give councils a buffer. So let’s not get too carried away by Andy Burnham on his ‘white horse’.

Crucially, how business rates are calculated for pubs must to be the priority and they need to be aligned with restaurants so the whole of hospitality is measured in the same way then there will be no divisions in such a vital industry.