Top UK chefs call for 10% VAT cut for pubs and restaurants

Four top UK chefs and restaurant owners have urged the government to cut VAT for restaurants and pubs as they warned working in the hospitality industry was the "hardest it has ever been".

Tom Kerridge, Yotam Ottolenghi, Ravneet Gill and Simon Rogan told BBC Newsnight VAT should be slashed to 10% to ease pressure on businesses and bring rates closer to levels across Europe.

"We're not making any money whatsoever, and we're just keeping our heads above water," warned Rogan, while Kerridge said the government was getting taxation on businesses "very, very wrong".

Cabinet minister Pat McFadden acknowledged the government had "asked business to contribute more", adding "we help them where we can".

He said the government was lobbied about tax cuts "all the time", but there was a cost attached.

"The chancellor has to make these decisions in the round, netting off all of these demands against the increasing expenditure demands that government also faces by people every day saying 'why can't you spend more on this or this'," McFadden added.

But Ottolenghi, who has 11 restaurants, cafes and delis, described the situation was "crippling" - not just for his own business, but for others running bakeries, cafes, and pubs.

"Every pound that we take, a substantial amount of it just goes to the government for a different taxation," he said.

The call from the famous chefs follows a tough few years for the hospitality industry. The height of the Covid pandemic brought trade to a halt before energy prices soared due to the war in Ukraine and pushed up costs across the board with little respite since.

While various support packages, such as the pandemic-era Eat Out to Help Out scheme and previous VAT relief provided a temporary a boost, three hospitality businesses have gone under every day since the start of 2026, according to the industry body UK Hospitality.

Value added tax, or VAT, is the tax people have to pay when buying goods or services. The standard rate of VAT in the UK is 20%.

The rate, which applies to UK hospitality businesses, is the second highest in Europe behind Denmark, according to UK Hospitality.

It has repeatedly argued for VAT to be lowered near to rates seen in Germany (7%), Ireland (9%), France (10%), Italy (10%) and Spain (10%).

Kerridge, who runs five restaurants and pubs, said there were "so many different factors" driving costs up and eroding margins, including government policy decisions such as higher rates of National Insurance for employers, business rates and the minimum wage.

The Labour party supporter claimed the industry had reached a "peak point" where businesses could no longer pass on price increased to customers. "It just doesn't work because it will stop people coming out."

Pastry chef and author Ravneet Gill, who opened her first restaurant a year ago, said she "never imagined it would be this tough", especially the expense when it came to employing people.

Rogan, who has nine Michelin stars across his restaurant group in the UK, Malta and Hong Kong, agreed it was expensive to take on staff, but said VAT was "a killer".

Kerridge and his fellow chefs indicated they supported the rise in the minimum wage, but argued a VAT cut from 20% to 10% for the sector would "allow operators to breathe" and also reinvest.

He claimed it was about "survival" for the industry rather than passing on the cut to customers through cheaper prices.

"Don't look at us as having profit is a dirty thing," added Gill.

"We're not going on fancy yachts and driving expensive cars. We are doing it so we can regenerate our areas that we're in, employ more people."

But Gill said she believed the policy was a "a very poor attempt at trying to offer something to hospitality and quite frankly it will lead to loopholes, fraud, misuse and no genuine good".

'Cutting employment costs can help young people'

Hospitality businesses such as restaurants, cafes and pubs often offer the first experience of work for many young people, with the industry employing 28% of all 18 to 20-year-olds, according to the Institute of Fiscal Studies.

However, those openings are disappearing: on Thursday, a damning report found job opportunities for young people were shrinking, with its author, former Labour minister Alan Milburn, saying the UK was "at risk of a lost generation".

The review came as official figures revealed more than one million young people were not in education, employment or training - the highest level in more than 12 years.

Following Milburn's report, the government said it was creating 300,000 work experience and training placements in sectors including construction, health and social care and hospitality.

Treasury minister Torsten Bell told the BBC's Today programme that the rates of employing aged 18 to 25-year-olds were "exactly the same as when we took office in 2024", but admitted higher taxes was having an impact.

The figures add to growing concerns over the number of young people not being able to secure a job in the UK.

Allen Simpson, chief executive of UK Hospitality, said the solution to the problem was to reduce the cost of employment for businesses.

"The government needs to make it economically beneficial to employ young people once again."

Rogan said when "when restaurants are under pressure," "investing in youngsters and sustainability, they're the first two things that fall by the wayside."

Food author Ottolenghi said there should be a public debate about "what we're losing" through restaurants closing.

"The risk for me is if those go... we're just going to kind of become a society where people sit around at home, look at screens and never interact with each other.

"We end up as an industry taking so much of the burden and government lays on more taxes. Those could come down quite easily for us because we employ all these young people and we give them skills."