26/07/2026
Total Tax Burden for hospitality!!
I’ve been quite surprised over the last 24 hours as to how many people don’t appreciate the significant difference between the total tax burden for hospitality compared with other sectors.
As an example, supermarkets (also food and drink) pay an estimated 8% to 11% of their total revenue in combined taxes. A pub or restaurant pays a crushing 28% to 35% of its turnover directly to the government.
This means a hospitality business carries a tax burden that is three/four times heavier relative to its revenue.
The UK tax system inherently protects the automated, low-margin, zero-rated grocery model of supermarkets while aggressively taxing hospitality businesses on their land footprint, their reliance on human workers, and a punishing 20% flat consumer VAT on everything they serve.
When a customer spends £100.00 at a restaurant table, £16.67 is instantly stripped away in VAT. Once you add rising employer National Insurance, and property rates, the government takes between £28.00- £35.00 of every £100.00 spent over the bar.
Andy Burnham’s recent Business Rates reduction was a positive step—but it is a drop in the ocean. This minor relief is easily wiped out by the major hikes in Employer National Insurance and National Minimum Wage.
Over 16,000 hospitality venues have already collapsed since the pandemic, because the current tax framework makes survival incredibly difficult.
Independent pubs and restaurants need a 10% hospitality VAT rate to stop a broken tax system from killing it.
Tom Kerridge
The Pheasant Inn
