Friday 24 September 2021 2:41 pm

Takeaways threatened: Customers may pay extra £2bn after tax hike

Consumers could end up paying an extra £2bn for takeaways, ahead of rises in VAT, the British Takeaway Campaign has warned.

VAT for hospitality is to rise to 12.5 per cent next month, ahead of another hike up to 20 per cent in March next year, to the frustration of beleaguered food bosses.

Takeaway operators were worried that they would have to pass the extra cost onto customers to keep their businesses going. Businesses face rising overheads and issues recruiting staff, the British Takeaway Campaign said.

The industry body estimated the price of a fish & chips meal could rise from £9 to £10.30 while a kebab could rise from £9.50 to £10.90

The group wrote to Chancellor Rishi Sunak to urge him to scrap the VAT increase next year and fees VAT at 12.5 per cent permanently 

Business rates relief should also be extended until 2022 and a visa to help the sector’s shortage issues should be introduced, the group said.

It also asked for an extension of grant support into next year and for the Kickstart jobs scheme to be extended and opened up to small businesses.

Total spending on takeaways in 2020 hit £15.1bn with many months where restaurants were closed for customers to dine-in.

Ibrahim Dogus, chair of the British Takeaway Campaign said it was a “real kick in the teeth” that VAT would be hiked as thousands of operators were struggling with supply and labour challenges.

“The Government must use the upcoming budget to protect our restaurants, not slap them down with costs they can’t afford. Without support, restaurants will be forced to pass the costs onto the consumer if they want to survive, meaning millions of families could end up paying more for their favourite curry, pizza or pho,” Dogus added.