UK Hospitality Sector Warns of £10 Pint Amidst Calls for VAT Reduction

Pubs and restaurants in Scotland could soon be charging up to £10 for a pint if the Scottish government does not support calls to aid the hospitality industry, according to business leaders. The sector is urging First Minister John Swinney to back a campaign pressuring Westminster to reduce Value Added Tax (VAT) from 20% to 10%.

Business chiefs warn that high streets could become 'desolate' without government intervention. The current VAT rate applies to most food and drinks served in pubs and restaurants, and landlords believe a reduction would enable them to keep prices affordable for customers.

Colin Wilkinson, managing director of the Scottish Licensed Trade Association, noted that while a £10 pint was previously predicted by 2030, current price increases could accelerate this trend. He expressed concern that such a price point would be a 'psychological barrier,' potentially alienating customers and impacting business viability.

Scottish Michelin-starred chef Tom Kitchin has joined over 100 hospitality firms in writing to Swinney, advocating for the VAT cut. He pointed to Ireland, where a reduced VAT rate of 9% has reportedly led to a thriving industry. Kitchin believes a cut to 10% in Scotland would create a 'level playing field' and help independent businesses, pubs, and the wider hospitality sector survive.

"We need John Swinney to listen, otherwise we’re going to walk down high streets and they’re going to be isolated, desolate," Kitchin stated, describing both the UK and Scottish governments as 'really anti-business'.

UK Hospitality Scotland has presented its 'Vats the Problem' campaign to Swinney, highlighting the immense pressure the sector faces. In a letter signed by prominent industry figures, including Michelin-starred chef Lorna McNee, they urged the Scottish Government to formally support the 10% hospitality VAT proposal and write to the Chancellor of the Exchequer and the Treasury. The letter references past support from the Scottish Government for reduced VAT rates and expresses hope for renewed assistance.

Deputy First Minister Jenny Gilruth confirmed her support for the industry's calls and stated she has written to the Chancellor urging him to consider the businesses' requests. She reiterated the Scottish Government's consistent support for a reduced VAT rate since the temporary reduced rate ended in 2022, aiming to alleviate cost pressures on businesses. Gilruth also highlighted the Scottish Budget 2026-27's business support package, estimated at over £870 million in reliefs, and mentioned that 96% of retail, hospitality, and leisure businesses in Scotland benefit from some form of rates relief. Additionally, the Small Business Bonus Scheme is noted as the most generous government-funded scheme of its kind in the UK, eligible for over 100,000 properties.