The hospitality industry needs “full surgery” rather than a “sticking plaster” of temporary tax cuts, a Dorset restaurateur has said.
Andy Lennox, who runs Dorset’s Zim Braai and Nusara restaurants and set up the local lobby group Wonky Table, launched a petition on Parliament’s website calling for VAT to be halved to 10 per cent for the industry.
Having sailed through the 10,000-signature threshold, the government responded to the petition earlier this month stating there were “no current plans” to reduce the sector’s sales tax.
Mr Lennox told the Daily Echo the petition had been successful in raising awareness of the issue and initiating an engagement on the subject with government.
He said the action was part of a wider campaign ahead of the autumn budget when HM Treasury is expected to look at tax reforms.
“Everyone is trying to focus on utility bills, which I am as well, but for me, the VAT is a much larger game and the reform needs to look long term,” Mr Lennox said.
“Our industry needs full surgery. A sticking plaster of a temporary VAT reduction and help with utilities is fine but the problem is our industry is taxed incorrectly for what it is, and this needs massive reform.”
Mr Lennox said the current tax system for the hospitality industry “did not make any sense”.
After launching the petition in November, he warned there would be business closures before Christmas.
Assessing the current landscape, he said: “Our industry keeps on being the boy who cried wolf. I say there is going to be closures and the government helps but I think that has come to an end and closures are coming.
“I am already seeing them. Places are closing quietly. I think it is going to get worse before it gets better.”
He added: “The question is not will you survive summer, it is will you make enough money in the summer to get you through next winter.
“This was the hardest winter I have seen in years and a lot of people have just scraped by, even some of our businesses which are busy. It was a tough long winter for us. The problem is there is nothing left in the tank. We have got to have a good summer.
“It was so hard getting through last winter, so there is a real worry. I think what you will see is a lot of people will close at the end of summer.”
In its response to the petition, which now has more than 18,000 signatures, HM Treasury said VAT relief for tourism and hospitality during the pandemic cost more than £8bn.
“While the Government has no current plans to reduce the rate of VAT for the hospitality sector, all taxes will continue to be kept under review,” the response said.
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