Lewisham council calls for lower hospitality VAT rates as small businesses face closure.

Lewisham council declared their support for VAT’s The Problem: a campaign spearheaded by Tom Kerridge to lower the value added tax rate for the hospitality industry to 10%. 

VAT’s The Problem calls for the government to reduce the hospitality VAT rate, lowering operating costs for our cafes, pubs, hotels and restaurants. Reduced VAT rates would also lower prices for customers. Lewisham council announced their support on 13 January. 

Unlike fellow European nations with 7-10% VAT, the UK currently sits at 20%, placing us as one of the highest in Europe. Reduction in VAT would allow hospitality businesses to make a greater profit and allow customers to save a few extra pennies. 

Shireen Asaw, a Ladywell councillor and cabinet member for workers, businesses and skills, believes it to be her responsibility to support local business owners and support the campaign. “A lot of local businesses are struggling just to stay open.” 

In recent years, hospitality venues have seen a rise in bills of approximately 300% resulting in many facing closure due to financial pressures.

“Majority of businesses in Lewisham are deemed micro businesses”, said Ms Asaw, “so they have fewer than five employees”. Small local businesses often face the most economic strain when operating costs rise. 

Nonki store and cafe, a mother and son run business in Hither Green, recently considered closure due to “rising costs and quiet midweek days”, said Cristina Toste, owner. The family business was reaching “breaking point”. Reducing hospitality VAT, as suggested by VAT’s The Problem and Lewisham council, would help many small businesses like Nonki to keep doors open. 

With 407,779 petition signatures, VAT’s The Problem are putting pressure on government to lower hospitality VAT rates. The support of Lewisham councils is a significant milestone for both the campaign and Lewisham’s business owners.