What Happened
Chef Dean Banks, owner of five restaurants including Haar in St Andrews and 1925 at the Pompadour in Edinburgh, offered diners a 20% discount on their meals over the weekend. This initiative aimed to raise awareness about the increasing pressure that Value Added Tax (VAT) is placing on the restaurant sector, which Banks describes as being ‘on its knees.’
Why It Matters
In an interview with The Caterer, Banks emphasized that while VAT is often perceived as a customer tax, it is the businesses that bear the administrative and financial burdens associated with it. He noted that operators must manage quarterly returns, currency charges, and card transaction fees, which average around 1%. Banks stated that many of his colleagues in the industry are struggling to make a profit, with some running at a loss due to rising taxes. He is advocating for a reduction in VAT from 20% to 10%, arguing that this change would significantly alleviate the financial strain on restaurants.
What’s Next
Following the successful weekend discount initiative, Banks reported that customers were supportive and engaged in discussions about the VAT issue. He hopes that this conversation will lead to broader awareness and potential policy changes regarding VAT in the food industry. As the restaurant sector continues to face challenges, the call for a VAT reduction may gain traction among other operators and stakeholders in the industry.
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