UK pubs and restaurants report 23% losing money, survey finds
7 reported
Nearly a quarter of UK pubs, bars and restaurants are losing money, according to new survey data released as a group of celebrity chefs and business owners launched a campaign for a sector-specific VAT cut. The campaign, spearheaded by chef Tom Kerridge and called “VAT’s the problem,” will be publicly launched from Wednesday to encourage visitors to sign a petition backing a reduction in VAT from 20% to 10%. The survey data, commissioned by an industry group, shows 23% of respondents are losing money, up from 15% three months ago, with one in six businesses at risk of going bust within 12 months and 5% reporting they are not financially viable. The campaign has received tentative backing from Britain’s prime ministerial hopeful Andy Burnham, though he did not mention it in a speech on economic priorities delivered on Monday. The proposal has met with skepticism from the independent thinktank Tax Policy Associates, which warned it would mainly benefit big businesses and that the estimated £10.5bn to £12bn cost could be better spent to spur growth.
What’s reported
23% of UK pubs, bars and restaurants are losing money, up from 15% three months ago.
One in six businesses said they risk going bust inside 12 months; 5% said they are not financially viable.
The campaign “VAT’s the problem” seeks to cut VAT on the industry from 20% to 10%.
The VAT cut is estimated to cost the Treasury between £10.5bn and £12bn.
The UK rate on food and drink service is higher than the European average of 12.8%.
France, Spain and Italy charge 10%, Germany charges 7%, and the Republic of Ireland is due to lower its rate for food-led businesses from 13.5% to 9% on Wednesday.
Labour’s decision to increase employers’ national insurance contributions and the national minimum wage, plus soaring inflation and energy costs, have added pressure on the sector.
Key figures
Tom Kerridge, chef with six venues and three Michelin stars
Andy Burnham, prime ministerial hopeful
Thomasina Miers, Wahaca founder
Nick Mackenzie, chief executive of Greene King (2,700-venue pubs chain)
Ravneet Gill, chef-restaurateur
Tax Policy Associates, independent thinktank
Sources: The Guardian
