At the UK's full 20% standard VAT rate, hospitality operators remain among the most heavily taxed in Europe, and chef Tom Kerridge has now joined the campaign to change that. The Michelin-starred owner of The Hand and Flowers in Marlow warned that "VAT is a problem and Britain's hospitality businesses are paying the price," speaking out as the sector presses Chancellor Rachel Reeves for relief in the autumn Budget.

Kerridge, who also operates Kerridge's Bar & Grill at the Corinthia Hotel in London, is the highest-profile chef-owner to add his voice to a campaign led by trade body UKHospitality. The group is asking the Treasury to set a 12.5% rate for eating out, overnight accommodation and related services. Several EU member states apply zero or sharply reduced VAT to restaurant meals, leaving UK operators at a structural price disadvantage against near-neighbours.

The UK's hospitality rate was cut to a temporary 5% during the Covid-19 pandemic, supporting an estimated 400,000 sector jobs while it lasted. The relief expired in March 2022, and the full 20% rate has applied to every restaurant, pub and hotel transaction since. No government has reinstated an operator-level concession in successive Budgets, despite repeated submissions from UKHospitality, the British Beer and Pub Association and the British Hospitality Association.

What is the size of the burden?

UKHospitality has consistently put the sector's economic contribution at around £93 billion a year, with 3.5 million people employed across pubs, restaurants, hotels and contract caterers. Output in several sub-sectors, particularly mid-market casual dining and regional pubs, has not recovered to pre-2019 levels on a like-for-like basis. With food inflation running above headline CPI in 2023 and 2024, the 20% VAT line on every transaction compresses gross margin at the point of sale.

Kerridge's own restaurants have performed strongly in that environment — The Hand and Flowers retains its two Michelin stars, and covers have held up through 2024. His intervention therefore reads less as a self-interested plea and more as a sector-wide diagnosis. The phrase "paying the price" frames the issue as cumulative: input inflation, the April 2023 business rates revaluation and successive National Living Wage increases have all landed on a tax base that has not been adjusted.

What happens next?

Reeves is expected to deliver the next Budget in the autumn, with the Treasury having warned of constrained fiscal headroom. A targeted VAT cut would require an explicit fiscal cost note and a consultation on scope, rate and duration. UKHospitality and the BBPA have indicated they will use the intervening months to press MPs and submit updated evidence on employment, investment and pricing.

For operators, the timing is critical: any rate change would not take effect until the start of the following tax year at the earliest, leaving a short planning window once the Chancellor speaks. The next concrete signal is likely to come from pre-Budget representations and any Treasury response to those submissions.