London Daily

Focus on the big picture.
Friday, Jul 11, 2025

'Nobody expected to be hit with this crisis': Hospitality businesses call for urgent VAT cut

'Nobody expected to be hit with this crisis': Hospitality businesses call for urgent VAT cut

Chef Simon Wood says his energy bill has more than doubled to the equivalent of an extra £26 per diner, adding: "Can you imagine if I popped £52 on a table of two before they've even come in and had a drink or a bite to eat?"

Business leaders are calling on the government to urgently cut VAT, as they struggle with increasing costs.

Many businesses are being hit by the same increases in bills as households, on top of other costs such as business rates.

But they also face the challenge of trying to sell their products or services to customers who are cutting back on spending.

Manchester's night time economy adviser Sacha Lord told Sky News: "I can't paint any positive picture at the moment - I'm more concerned now than I actually was during the pandemic.

"Operators have taken on so much debt in the last two years, and that debt, by the way, did actually save businesses and jobs.

"But coming out of this, nobody expected to be hit with this crisis."

He said that both Rishi Sunak and Liz Truss - the candidates vying to replace Boris Johnson as prime minister - are not acting quickly enough.

"We need immediate intervention and I think, for once, myself and the other trade bodies, we're all calling for the same thing.

"We're calling for an immediate reduction in VAT - that will save businesses and save jobs."

VAT cut 'the only way to get over this next hurdle'


Simon Wood, who owns a number of restaurants including his flagship in Manchester, agreed, telling Sky News: "The VAT reduction for me and for many operators is the only way to get over this next hurdle."

He said the four months ago, the gas bill for his restaurant WOOD Manchester was £3,000, plus another £3,000 for electricity. Now it is £8,000 for each - a total of £16,000.

"That's £26 per person who comes through the door, roughly.

"Can you imagine if I popped £52 on a table of two before they've even come in and had a drink or a bite to eat?"

He added: "It's a situation we can't change and that leads into recruitment - if people do leave, we struggle to replace those positions because the revenue isn't coming through the building and we've got bills to pay and overheads which are sky-rocketing."

He said his own businesses was not going to go bust but said there would be "some casualties" in the sector.

"We have to adapt or pivot or whatever phrase you want to put on it.

"And we have to figure out a way to get by this and hopefully some respite comes in the form of a VAT reduction or energy costs with a sensible cap, and someone from government intervenes with a sensible strategy."

'A deluge of new cost pressures'


David Bharier, head of research of the British Chamber of Commerce (BCC), said: "In recent months, our research has highlighted the increasingly precarious sate of the UK economy. Firms that scraped through the pandemic are now faced with a deluge of new cost pressures.

"Our most recent survey from Q2 showed that energy costs are cited as the top driver of inflation by businesses. Two thirds are telling us they plan to put up their own prices in the next three months - the highest level on record. Inflation is now cited as by far away the top concern by firms across the UK.

"Cutting VAT on businesses' energy bills to 5% would at least ease the squeeze on firms' cashflow and give them some room for manoeuvre.

"The next budget must be the main priority of any new prime Minister and chancellor - a chance for them address both the short-term and structural issues facing the economy."

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×