Restaurants seek wider tax relief as UK cuts pub rates
Industry leaders say broader tax relief would unlock investment and protect jobs.
Hospitality leaders are calling for a more expanded business rate cut after the government's announcement limited relief to pubs, social clubs and live music venues, leaving restaurants and independent food businesses without equivalent support.
Nicolas Burquier, Managing Director of Pizza Hut, UK, welcomes the announcement as a positive first step but argues the Government should extend business rates relief to restaurants and reduce hospitality VAT from 20% to 10%.
“For our franchisees, lower VAT and fairer business rates would unlock investment in restaurants and teams, protect jobs and help keep eating out, or ordering in, affordable. Together, these measures would give the restaurant sector the backing it needs to thrive,” Burquier said in a statement.
Meanwhile, Saxon Moseley, partner and head of leisure and hospitality at leading audit, tax and consulting firm RSM UK, said the relief for pubs, clubs, and live venues is meaningful as pubs are at the heart of communities.
This social value has been acknowledged with today’s planned measures to attempt to stem the flow of financial distress,” Moseley said. “However, a thriving high street is more than pubs, clubs and live venues and excluding restaurants and hotels creates confusion around eligibility and further complexity and nuance in the tax system.
Moseley adds that this move will offset some of the significant rate burden in the short-term, but what is needed is widespread rate reforms that instils fairness across the hospitality industry to make it cheaper for businesses to operate to attract investments to the high street.
Simon Mitchell, CEO of KERB, an organisation of 150 independent street food traders, said that whilst business rate changes are a welcome first step, they urged the government to go further by delivering a VAT reduction that would bring them in line with other European countries.
“Without that, we risk a future that stunts the growth of thousands of brilliant independent food and beverage businesses, and high streets and communities that are worse off as a result,” Mitchell said.
On 23 July, the British government announced a 20% cut in business rates for nearly 32,000 pubs, social clubs and live music venues across England from April 2027, in a package worth around £100m a year.
The relief, which will save the typical pub an estimated £1,100 in the next financial year, comes on top of a 15% reduction already announced in January for pubs and live music venues, with bills frozen in real terms for a further two years.
The package will be fully funded through a review of reliefs for businesses the government said do not make a positive contribution to local communities, including vape shops, alongside measures targeting online marketplace sellers that do not comply with their tax obligations.
