More than 250 hospitality bosses call for VAT freeze as diners hit by rising costs

Restaurant bosses from big names including JD Wetherspoon and Greene King have signed a letter to the Chancellor calling for a VAT freeze at 12.5 per cent.

In an open letter to Rishi Sunak, more than 250 hospitality businesses have called for a re-think of plans to hike the VAT rate back to 20 per cent in April.

Businesses need tax relief to continue in order to fully recover from the side effects of the Covid pandemic, especially as firms and consumers battle soaring costs this year, bosses said.

Organised by industry group UKHospitality, signatories range from small hotel businesses to household names including Pizza Express and Center Parcs.

The reduced rate of VAT had been an “incredible success” and helped firms retain jobs and stay open, the letter stated. “The pandemic highlighted how much the nation has missed hospitality and tourism, and the important part it plays in our lives,” it added.

“However, costs are increasing and our customers are feeling the pinch. The imminent return to a 20% VAT rate will exacerbate the squeeze on household finances,” the letter went on.

Rising prices have been absorbed through “the headroom provided by the reduced VAT rate,” and surging labour, energy and supply costs mean the reduction is “ever more important.”

Kate Nicholls, CEO of UKHospitality, said a freeze was about “so much more” than extending temporary pandemic measures. 

“It’s about working to establish the right tax level for our world-class hospitality and tourism industries. It is vital, in the interests of competitiveness, job creation, growth and ensuring hospitality and tourism play their full part in driving the economic recovery,” she added.

Other big names to sign the letter include chiefs from Caffe Nero,Côte, Fuller’s, Hilton, IHG Hotels and Resorts, Loungers, Marston’s, Mitchells & Butlers, Nobu, Pizza Hut, the Restaurant Group and Wagamama.