VAT campaign: One-in-six hospitality businesses risk closure

By Oliver Catchpole

Published: 01 July, 2026

According to a recently released survey – conducted by UK Hospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster – one-in-six hospitality businesses in the UK say that their business is at risk of failure in the next 12 months.

This comes after mounting cost pressures on the industry, with almost a quarter of respondents (23%) operating at a loss – up from 15% three months ago.

While the Republic of Ireland has today reduced its VAT on hospitality to 9%, businesses in the UK are still fighting to be heard, with the #VATsTheProblem campaign continuing to grow.

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The initiative – spearheaded by chef Tom Kerridge – has seen more than 240,000 backing a petition to cut hospitality VAT from 20% (the second highest rate in Europe) down to 10%.

Respondents to the survey were also keen on such cost-alleviating measures, with 89% backing such a cut.

In a joint statement, the trade bodies said: “We are seeing the devastating impact of hospitality’s heavy tax burden escalate before our eyes.

“The reality is stark. The number of businesses now operating at a loss is accelerating rapidly and too many businesses are facing the gut-wrenching decision of whether they have to close their doors for good.

“Our local pubs, restaurants, hotels, cafes, and many more, are integral parts of our communities. They create millions of jobs, drive growth on our high street and support cities, towns and villages. The loss of these businesses is more than just numbers on a spreadsheet, it tangibly impacts our society and our culture.”

From today (1 July) hospitality venues will be communicating with their customers about the #VATsTheProblem campaign, urging them to get behind it to support their local.

Commenting on the value of this push, Kerridge added: “This shows why we need hospitality VAT cut to 10%. Our hospitality culture in the UK is the best in the world, but we continue to be hit with unfair levels of tax.

“Just look across Europe. Almost every other country recognises the need to support hospitality with a lower rate of VAT. Now, Ireland becomes the latest.

“240,000 people agree with us that the government should act to bring hospitality VAT down to 10%, in line with Europe. VAT is the problem – 10% is fair for hospitality.”

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