Celebrity cook Tom Kerridge expressed optimism about the possibility of Andy Burnham reducing VAT for pubs and restaurants if he becomes Prime Minister. Kerridge mentioned discussing the tax cut with Burnham’s team, following Burnham’s support for the idea. The industry is hopeful that the tax reduction may be implemented once Burnham takes over from Keir Starmer as PM.
Kerridge praised the Mirror’s “Your Pub Needs You” campaign for advocating for the industry, calling it a valuable effort. The hospitality sector believes that halving VAT from 20% to 10% would provide much-needed relief after facing increased costs and bring the UK in line with other countries.
Despite the industry’s hopes, the Treasury estimates that halving VAT would result in over £10 billion in lost tax revenue. Tax expert Dan Neidle criticized the move, stating that it would mainly benefit larger corporations like McDonald’s, with a significant portion of the hospitality sector already exempt from VAT.
Kerridge argued that the lost tax revenue from VAT reduction is a necessary investment for the industry’s growth and survival. He emphasized the importance of supporting local businesses over large corporations, highlighting the potential impact on struggling hospitality establishments.
A survey by various trade bodies revealed that a significant portion of hospitality businesses are operating at a loss, indicating the urgent need for financial support. Greene King’s CEO, Nick Mackenzie, noted that any savings from a VAT cut would likely be reinvested in the business rather than passed on to consumers.
Mackenzie emphasized the importance of providing breathing space for small businesses to survive and thrive, emphasizing the potential positive impact on tax revenue and job creation. The industry is looking to policymakers to take action that will support its recovery and long-term sustainability.
