Entrepreneur calls for VAT cut with Government petition as hospitality closures continue

A Staffordshire entrepreneur has launched a parliamentary petition to halve VAT for the hospitality sector, warning thousands of businesses, jobs and millions in tax revenue are at risk.

Craig Wilkinson, who operates several companies across hospitality, events and technology, is calling for VAT in hospitality to be lowered from 20 per cent to 10 per cent to bring the UK in line with European counterparts.

His restaurant, Lunar at Barlaston, employs over 20 people, contributes around £300,000 annually to local employment, and generates approximately £120,000 per year for HMRC. He says the business would still contribute an estimated £75,000 annually in tax with the VAT cut, but would also have improved chance of becoming more sustainable.

Using Lunar’s figures as an average, Craig estimates the national impact could be significant. With 2,190 hospitality closures forecast in 2026, Craig warns the Government could lose £164 million in annual tax revenue and £657 million from local economies.

New survey results show 15 per cent of hospitality venues will be forced to close as a result of increases to employment costs and business rates which came into force yesterday.

The survey by UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster also reported 64 per cent of hospitality businesses will cut jobs, 51 per cent will cancel investment plans, and 42 per cent will reduce trading hours.

Hospitality rates in France, Italy and Spain are around 10 per cent, while Germany applies rates as low as seven per cent for certain hospitality services.

Craig said: “Costs have surged so aggressively and so quickly in recent years, and continue to do so, that hospitality is facing a sustained existential crisis.

“We urge operators experiencing the same pressures to share this petition, and the public to sign it, so Government takes this seriously before more businesses disappear, jobs are lost, local economies are weakened, and ultimately the Treasury loses significant long-term tax revenue.”

He added: “While businesses continue to absorb rising costs; including wages, energy, and supply chains VAT and business rates remain two of the few levers Government can directly control.”

Craig Wilkinson (right) and Lunar’s Restaurant and Event Manager Lewis Martin (left) have met with Stoke-on-Trent South MP Allison Gardner (centre) to express concerns about the hospitality industry.

Craig’s action follows discussions with industry leaders at a recent meeting hosted by Staffordshire Chambers of Commerce, which is planning to launch a new hospitality forum.

The petition, now live on the UK Parliament website, aims to force the issue onto the political agenda. The government must formally respond if it reaches 10,000 signatures. At 100,000 signatures, it may be considered for debate in Parliament.

Craig, whose other businesses include Alberts café in Stafford and an immersive theatrical dining experience in London, added: “With the right support, the sector can stabilise, grow, and continue contributing billions to the UK economy.”

Last week, Daily Focus reported that latest accounts show rising costs have increased losses at Parogon Pub Group.

Recent hospitality business closures in Staffordshire include Sakana restaurant in Great Wyrley, Slater’s Country Inn in Baldwins Gate, The Shed in Maybank, and The Jolly Potters pub in Stoke-on-Trent.

Meanwhile, The Grosvenor at Hales Hall near Cheadle has decided to shut its restaurant, The Little Cake Shack in Silverdale is closing on 10 April and No 5 Café in Leek will cease trading at the end of April.

Declan Riddell, the Chamber’s policy adviser, said: “We’ve seen a sharp rise in concerns raised by our members who operate in hospitality.

“Soaring growth in labour costs in a sector which operates in typically tight margins in normal trading conditions, let alone when costs are spiralling.

“Food inflation, an unreformed business rates system and rising energy costs have left many hospitality businesses battling economic headwinds and having to face tough choices.”