Pubs across Birmingham are sounding the alarm, urging the government to reduce VAT rates which they say are “cutting the oxygen off” businesses struggling to survive. Currently, all food and drink sold in pubs is subject to a 20% VAT, while supermarkets pay no VAT on food, giving retailers an edge to offer alcohol at discounted prices.
Last August, when asked about the possibility of addressing VAT concerns in hospitality, West Midlands Mayor Richard Parker acknowledged the disparity but indicated limited government appetite for change.
Despite this, the issue remains deeply concerning for local pubs. The Station in Kings Heath described the situation as “heartbreaking,” emphasizing how the 20% VAT, combined with rising costs for food, business rates, beer duty, employment charges, and energy, is driving many hospitality businesses toward closure.
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In a heartfelt social media statement, The Station lamented the crushing financial pressure: “The number of businesses in hospitality struggling right now is truly heartbreaking… We are cutting the oxygen off to so many businesses, small and large. VAT at 20 percent is neither fair nor proportional… It kills enterprise, jobs, and hope.”
They called for fairness in taxation, highlighting how young people seeking work are impacted as businesses close or downsize. The post concluded with a plea for community support: “If you love your local pub, café or restaurant, please share this message… Less VAT, more hope. Less VAT, more jobs. Less VAT, more beer.”
Similarly, The Dark Horse in Moseley echoed these sentiments, advocating for a reduction of VAT to 10%. Citing comparisons across Europe—where countries like France, Spain, and Italy levy 10%, and Germany just 7%—The Dark Horse launched a petition to garner support for fairer hospitality tax rates.
They stressed the vital role pubs, restaurants, cafes, hotels, and nightclubs play in communities, and warned that sustained high VAT rates undermine local economies, jobs, and social cohesion. Their clear message to the government: reduce VAT to 10% for hospitality and stand with local businesses.