Hospitality leaders call for relief on rates and VAT as another high profile operator shuts doors

Night time economy adviser Sacha Lord has called for a levelling down of VAT for hospitality businesses and a renewed focus from government on the sector.

He was speaking in reaction to what he describes as a “string of restaurant closures across the UK” specifically citing the shock new year announcement by TV chef Simon Rimmer that he was closing his restaurant Greens in Didsbury, Greater Manchester, due to rises in rent, rates, and operating expenses.

“We are now seeing the unfortunate damage that the turbulent economic year has caused in real terms,” Lord said.

“The closure of Greens is a stark example that even in regions of relatively high disposable income, the financial pressures on small businesses are simply no longer viable especially when household budgets are being squeezed more than ever by food price inflation or rising energy costs.

“With MPs not returning to Westminster until next week, I would urge ministers of both parties to take this time to meet small business owners in their constituencies to truly understand the realities they are facing in this difficult climate.

“On countless occasions we have seen policy u-turns due to the lack of understanding of the most pressing issues, or measures which could significantly boost trade being misunderstood or neglected entirely, such as a reduction in VAT for hospitality to match European counterparts or the specific appointment of a minister for hospitality who can better advise on the complexities of the industry.

“It is only by listening to experts and the business owners on the ground that the right policies can be made which not only stimulate economic growth in the long term but help ensure the viability of the UK’s fifth biggest industry for the years ahead.”

Simon Rimmer calls time on Greens in Didsbury

Rimmer is keeping the Sale branch of Greens open for business, but his heartfelt video message (pictured) announcing the closure has shocked customers and fellow hospitality operators alike.

Will Lees-Jones, managing director of JW Lees also referred to the tough trading conditions this week as he saw a huge fall in profits across his pub estate, with no relief in VAT, rates or other business costs.

He was critical of present government policy towards hospitality and called for a number of “simple things” that would ease the burden on the business, notably rates reform and alcohol duty.

“The government says that it recognises how important the hospitality sector is but needs to start to think differently about how it invests in the sector.  There are so many simple things that government could do, including the long-promised root and branch review of business rates and fairer rates of both alcohol duty and VAT, which are among the highest in the world.  The current year’s challenges include continued high energy costs and inflation; we are also starting to see the impact of the Alcohol Duty Review which came into effect in August,” he said.

In the run up to Christmas TheBusinessDesk.com reported the frustration of Jonny Heyes from iconic pizza outlet Nell’s that he had seen hit with an unnecessary and unjustified rates bill from Manchester City Council.

Yet there is optimism. Hospitality businesses often pivot, change the concept, shut down one idea and start up with another. Case in point: Cottonopolis, the Asian-inspired restaurant and bar based in Manchester’s Northern Quarter has announced its permanent closure after eight successful years, to make way for an exciting new concept. 

The venue will not reopen as Cottonopolis in 2024, but instead owners, Nick and Hayley Muir have confirmed there are already plans underway to launch a new brand with a fresh fit-out and entirely new food & drink offering in the Grade II listed building in early 2024. 

Nick and Hayley Muir are also the directors behind the Edinburgh Castle pub on Blossom Street, Ancoats. They transformed the derelict 200-year-old pub in Ancoats, building up its reputation for exceptional food & drink, resulting in the pub recently being named as one of the best gastropubs in the UK.