Every operator we work with is managing the same pressures from a different angle. Rising input costs. Staffing challenges. Guests who are more careful than ever about where they’re spending their money. The variables shift week to week — the squeeze doesn’t.
Most of those pressures have no simple fix. But there’s one number that sits underneath all of them — quietly, structurally, on every single transaction your guests make — that could change with the right political will.
VATs The Problem is a UK hospitality industry campaign led by Tom Kerridge calling on Government to cut hospitality VAT from 20% to 10%, in line with rates across France, Spain, Italy, and Germany. The campaign is backed by UKHospitality, the BBPA, the BII, CODE Hospitality, and Pepper, and is targeting one million signatures ahead of its consumer launch on 1 July 2026.
UK hospitality pays 20% VAT. France pays 10%. So does Spain. Italy. Germany pays 7%.
That’s not a marginal difference. Before you’ve influenced a single cost line, before you’ve made one operational decision, your guests are paying almost double what their European counterparts pay to sit in a pub, eat in a restaurant, or stay in a hotel.
Tom Kerridge and the VATs The Problem campaign are asking Government to change that. The ask is 10% — in line with most of Europe. We’re behind it fully. Here’s why it matters.
The gap is bigger than most people in the industry talk about. Recent data from UKHospitality, showed 3 hospitality businesses closing every day in 2026, 2,076 forecast closures this year
The UK has operated at a standard 20% VAT rate on hospitality since the temporary 5% and 12.5% COVID-era reductions were withdrawn in 2022. Since then, the industry has absorbed rising energy costs, higher business rates, wage increases driven by minimum wage legislation, and a consumer base under genuine financial pressure.
Against that backdrop, 20% VAT isn’t just a tax line. It’s a structural disadvantage that sits on top of every other cost — one that the majority of our European competitors simply don’t face to the same degree.
The House of Commons Library has documented the disparity clearly. The UK’s hospitality VAT rate is among the highest in Europe, and the gap directly affects the price your guests see on a menu, the margin you’re left with after every cover, and the commercial case for investing in growth.
This is the context the VATs The Problem campaign is operating in — and it’s the context every operator reading this already knows from first-hand experience.
Who’s behind the VATs The Problem campaign
The campaign is led by Tom Kerridge — chef, publican, and one of the most recognisable voices in UK hospitality — and has drawn backing from across the industry. Yotam Ottolenghi, Ravneet Gill, and Simon Rogan have all added their names. So have the industry’s most important trade bodies: UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping, and CODE Hospitality.
Speaking on the campaign, Simon Rogan described the UK’s tax burden on hospitality as one of the most significant structural barriers facing operators right now. The BBC covered the campaign’s launch in late May 2026, with leading UK chefs making a public call for parity with European rates. The Morning Advertiser and Restaurant Online have both run detailed coverage of the coalition’s case.
This isn’t a niche campaign from one corner of the industry. It’s a broad coalition making a clear, commercially grounded argument — and the petition is targeting one million signatures ahead of its consumer launch on 1 July 2026.
Sign the petition at vatstheproblem.co.uk
What a 10% VAT rate actually means for your business
The headline number is straightforward: cut VAT from 20% to 10% and you halve the tax burden on every transaction your guests make. But the commercial knock-on effects go further than the immediate margin benefit.
Lower VAT creates two levers — and both of them drive the metric that matters most on any hospitality P&L.
You can pass the saving on to guests through lower prices, making a visit to your venue more accessible and more competitive against eating in. Or you can protect and reinvest margin — into your team, your product, and the guest experience that turns a first visit into a habit.
Either way, the outcome is the same: more visits, higher frequency, and a stronger case for building loyalty. That’s the commercial logic behind every loyalty programme for pubs and bars we run, and every loyalty strategy in hospitality we’ve built with operators across the UK high street. Visit frequency is the single lever that moves the most on a hospitality P&L. A fairer tax environment makes it easier to pull.
Why we’re backing VATs The Problem
We work with operators every day who are doing everything right — investing in their teams, building genuine guest relationships, using data to drive smarter decisions. The results we see consistently show that operators who own their guest relationships grow faster and hold margin better than those who don’t.
But even the best-run businesses find it harder to grow when the structural conditions are working against them. A 10% VAT rate doesn’t replace the work of building a direct guest relationship, running a tight operation, or investing in the right technology — whether that’s direct delivery for restaurants or a loyalty and ordering platform that connects every part of the guest journey. What it does is make all of that work pay off more.
Charles Hall, CEO of Pepper, put it this way:
“The conversation in hospitality is always about what operators can control — their costs, their teams, their guest relationships. But VAT sits outside all of that, and at 20% it’s one of the biggest single pressures on every transaction in the sector. France, Spain, Italy — they’ve all recognised that hospitality needs structural support, not just goodwill. The case for 10% isn’t complicated. It’s just overdue, and we think it’s worth every operator in the UK adding their name to it.”
Sign the petition. Add your voice.
The campaign is live now at vatstheproblem.co.uk. Signing takes two minutes. Sharing it takes ten seconds. The target is one million signatures — because the more operators, chefs, staff, guests, and industry voices behind it, the harder it is for Government to ignore.
If you run a restaurant, pub, bar, café, hotel, or any other hospitality venue — this is your campaign. The operators we work with know better than most how much difference the right commercial conditions make. This one is worth fighting for.
Sign the petition at vatstheproblem.co.uk
Want to see how Pepper helps you build the direct guest relationships that make every margin improvement work harder? Explore PepperOS platform features or talk to our team about what’s possible for your venues.
Frequently Asked Questions
What is the VATs The Problem campaign?
It’s a UK hospitality industry campaign led by Tom Kerridge calling on Government to cut VAT for hospitality from 20% to 10%, in line with the rates charged across most of Europe.
Why does UK hospitality VAT matter to operators?
UK venues pay 20% VAT on every transaction. France, Spain, and Italy pay 10%. Germany pays 7%. That gap sits on every bill before an operator has influenced a single cost line.
How do I sign the VATs The Problem petition?
Visit vatstheproblem.co.uk and add your name. The campaign is targeting one million signatures ahead of its consumer launch on 1 July 2026.
Who is backing the VATs The Problem campaign?
The campaign is supported by Tom Kerridge, Yotam Ottolenghi, Ravneet Gill, Simon Rogan, UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping, CODE Hospitality, and Pepper.
What would cutting hospitality VAT to 10% mean for my business?
Lower VAT means lower costs or lower prices for guests — both drive visit frequency, which is the single lever that moves the most on any hospitality P&L.
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