Hospitality firms call for urgent VAT cut

Pubs and restaurants in the south of England are calling on the government to reduce VAT in the hospitality sector.

The owners of several businesses in Dorset and Oxfordshire, say the sector is "on its knees" and has still not recovered from the Covid pandemic.

Dave Burns from The Thomas Tripp pub in Christchurch, says rising costs and increased national insurance contributions from employers has led to dozens of venues cutting staff and in many cases, closing down.

Treasury minister James Murray MP says the reason hospitality has 20% VAT is to pay for and maintain public services.

The Thomas Tripp pub in Christchurch recently topped a Tripadvisor poll in the area

Dave Burns owns two pubs and two restaurants in Christchurch and Bournemouth.

He wants the Government to reduce VAT for hospitality firms from 20% to 10%.

"With the rises in tax, it's like the perfect storm, combined with the soaring energy prices. The margins have just been completely wiped out.

"That, combined with the struggle employing people in the first place, to then get hit with the national insurance rise which we have had, is really hurting," he said.

Burns believes a cut in VAT from 20% to 10% would make a huge difference to venues that are struggling.

"That is the easiest fix, that would make a massive impact in the sector."

Tommy Higgs (left) and Michael Dove, co-owners of The Three Horseshoes at Witney, Oxfordshire, are lobbying the Small Business Minister in Westminster for a VAT cut

High levels of taxation is an issue at pubs, restaurants and hotels across the south.

Tommy Higgs is co-owner of the award winning Three Horseshoes in Witney, Oxfordshire and said that five years ago he was making 84p profit on a pint of beer but that has shrunk to just 12p in 2025.

"The taxation is crazy in this industry now. A busy pub doesn't mean a profitable pub.

"Pubs are getting taxed out of existence. And there's a real possibility that in five years, there won't be any pubs at all," according to Mr Higgs.

Co-owner Michael Dove agrees and says they are both lobbying ministers in Westminster this week.

"Ultimately, change needs to happen and it needs to happen now" Michael said.

"There's been too much talk for many years about the hospitality industry and how it's being destroyed. Promises are made, nothing happens. Change needs to happen now, otherwise, pubs might not be here in a few year's time".

James Fowler, owner of The Larder House in Southbourne, Bournemouth, says 'margins have never been tighter'

It's a similar story at Bournemouth restaurant, The Larder House in Southbourne.

Owner James Fowler says margins have never been tighter, "it's the highest rate of taxation that we've ever seen" he said.

"It's getting to the point that our final profits are so small now, you've got be really, really savvy and on the ball about every single thing, just to make sure you survive.

"I've dwindled back my other businesses, I've got the smallest team I've ever had, I'm working more just to continue going really."

Tom Hayes is the Labour MP for Bournemouth East and he's calling on Chancellor Rachel Reeves and members of his own party to help.

"Hospitality businesses are paying taxes that help to bring down NHS waiting lists in a time of difficulty," he said.

"I know hospitality is under pressure and I want to do all I can to support.

"I've written to the Chancellor to ask for targeted support for smaller and family owned businesses, so that our local hospitality sector can thrive."

Tom Hayes, MP for Bournemouth East, believes hospitality businesses are "feeling the pain" of increases in taxation

Christchurch MP Sir Christopher Chope (left) has written to the Treasury about the plight of hospitality businesses in the constituency.

Sir Chris Chope is a Conservative MP for Christchurch, who recently wrote to the Treasury about the plight of hospitality firms in the constituency.

"We need to reduce VAT in the hospitality industry, to bring it more in line with what's charged on the continent, but there's no chance of that happening under the present government so I'm joining those in despair," he said.

In a written reply to Chope, James Murray reiterated that VAT was at 20% to pay for and maintain public services.