VAT cut tops readers’ Budget wish list

Budget speculation: Operators question impact of reported biz rates relief
Pre-Budget poll: VAT cut tops readers’ wish list (Lauren Hurley / No 10 Downing St)

Almost two thirds of Morning Advertiser (MA) readers want the Chancellor to cut VAT for pubs and hospitality at this week’s Budget, an exclusive poll has revealed.

Some 62.5% of respondents, 40 of the 64 people who voted, said a VAT cut was the measure they most wanted to see announced by John Healey on Wednesday (28 October).

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Business rates reform was the second most popular choice, securing 12.5% of votes, followed by a cut to employer national insurance at 10.94%.

A reduction in alcohol duty received 9.38% of votes while 4.69% selected lower employment costs.

The results follow repeated calls from operators for a hospitality specific VAT rate, with several businesses previously telling The MA a reduction to 10% would provide immediate support to increasingly squeezed margins.

Admiral Taverns chief executive Chris Jowsey said the UK’s VAT rate for hospitality was “almost double that of many of our European neighbours”.

He added: “As an industry, we are calling on the Government to reduce VAT for hospitality to 10%, giving pubs across the country some much needed breathing space and helping publicans build more sustainable businesses.

“The inclusion of drink as part of the reduction would be key. It is important wet-led pubs are included to avoid an unfair advantage developing if the Government reduced VAT on food but not drink.”

Chestnut Group managing director Philip Turner said a VAT change was the measure that could impact the sector “really quickly”, while Three Hills Bartlow managing director Emma Harrison said cutting hospitality VAT to 10% would make an “immediate and meaningful difference” to pubs and restaurants.

Tamil Prince and Tamil Crown owner Glen Leeson also backed a VAT reduction, warning a busy hospitality business was “not always a profitable” one.

The calls come as British Beer & Pub Association analysis showed the beer and pub sector supports almost 1m jobs, contributes £37.8bn to the UK economy and generates £16.8bn in tax.

Damm UK managing director Luke White said the Budget presented an opportunity for the Government to support investment across the sector, backing a freeze on beer duty alongside business rates reform.

He said: “A freeze on beer duty, alongside reform of business rates, would help pubs manage the continued pressure on their margins, keep pints affordable and give businesses greater confidence to invest and plan for the future.

“We want to continue investing, creating jobs and supporting the wider hospitality sector, but a stable and competitive business and tax environment is important if we are to keep that momentum going.”

Previous Budgets

Hospitality received no sector specific VAT support at the 2025 Budget, despite repeated calls for a reduction. The standard VAT rate remained at 20%, while the VAT registration threshold stayed at £90,000.

The Budget did introduce permanently lower business rates multipliers for eligible retail, hospitality and leisure properties from April 2026, alongside support for businesses facing significant increases following revaluation.

A year earlier, the October 2024 Budget increased employer national insurance from 13.8% to 15% and reduced the threshold at which employers begin paying it from £9,100 to £5,000. Those changes came into force in April 2025.

The 2024 Budget also reduced draught alcohol duty by 1.7% in cash terms, widening the differential between draught and non draught products.

The latest poll suggests VAT remains the clear priority for operators and readers ahead of this week’s fiscal statement.