The UK's hospitality sector is facing huge pressure. Rising costs, increasing wage bills, higher energy prices and business rates are all squeezing margins for hospitality businesses already working hard to serve their customers. Now, a nationwide campaign led by publican and chef Tom Kerridge is calling on the Government to act.

What is the VAT's The Problem campaign?

The VAT's The Problem campaign is a nationwide campaign calling on the Government to reduce VAT for hospitality from the current standard rate of 20% to 10%. Led by chef and publican Tom Kerridge and backed by major hospitality industry bodies, the campaign aims to secure one million signatures through the VAT Is The Problem petition before it closes on 12 September 2026.

Supporters argue that a hospitality VAT reduction would help protect jobs, support local businesses and create a stronger future for hospitality across the UK.

Why are hospitality businesses calling for a VAT cut?

One of the campaign's central arguments is that the UK's hospitality VAT rate is significantly higher than many of its European neighbours.

At 20%, the UK's hospitality VAT rate is among the highest in Europe. By comparison, Germany charges 7%, Poland 8%, the Netherlands and Ireland 9%, while France, Italy and Spain all apply a 10% VAT rate to hospitality. Even countries such as Belgium, Sweden and Norway operate at 12%.

The campaign is therefore not calling for an unusually low rate. Instead, it seeks to reduce VAT to 10%, bringing the UK more closely in line with other major European economies and creating a fairer environment for hospitality businesses competing with international markets.

Supporters believe that lower VAT rates help restaurants, pubs, cafés and other venues invest in growth, remain competitive, attract customers and support local jobs. At a time when hospitality businesses are facing rising food prices, increasing wage costs, higher energy bills and growing business rates, many operators believe a VAT cut would provide much-needed breathing space.

Why does it matter?

Hospitality is more than just food and drink. It is a major employer, a contributor to tax revenue and a vital part of communities across the country.

From independent cafés and family-run pubs to restaurants and hotels, local businesses bring life to the high street and support local jobs. Yet many operators are facing significant financial pressure at a time when costs continue to rise.

Campaign supporters believe a VAT cut would:

• Help protect jobs across the hospitality industry
• Support local businesses and local communities
• Improve cash flow for hospitality businesses
• Encourage consumers to spend more in pubs, cafés and restaurants
• Strengthen high streets and local economies
• Give businesses more breathing room to invest and grow

For many operators, reducing the rate of VAT could be the difference between survival and closure, helping to create a stronger future for hospitality throughout the UK.

Why hospitality businesses should get involved

The hospitality sector has proven its resilience time and time again, but the combination of rising costs, business rates, wage inflation and a higher rate of VAT continues to put pressure on profits.

Whether you run a pub, restaurant, café, hotel or other hospitality venue, this campaign is about ensuring the UK has a fair and competitive VAT system that recognises how important hospitality is to jobs, communities and economic growth.

Sign the Petition and Make Your Voice Heard

If you believe hospitality deserves a fairer VAT rate, now is the time to act.

Sign the VAT Is The Problem petition today and support the call to reduce VAT for hospitality to 10%.

You can learn more and add your name here: https://www.vatstheproblem.co.uk/

Need Help with Hospitality VAT?

At HLWA, we work closely with hospitality businesses across the UK and understand the challenges operators face. As BII Accredited Advisors to the Licensed Trade, we provide practical, no-nonsense advice on hospitality VAT, tax planning, cash flow management and business performance.

If you're struggling with VAT, unsure you're paying the right amount, or simply want expert guidance on managing your tax position, contact HLWA today. Our specialist hospitality accountants are here to help you protect profitability and build a stronger future for your business.

Get in touch with HLWA to discuss your VAT challenges and discover how we can support your hospitality business.