More than 800 UK hospitality businesses have urged prime minister Andy Burnham to cut VAT from 20 per cent to 10 per cent ahead of next month’s Budget.

The open letter, backed by pub groups, restaurant chains, hotels and independent businesses, forms part of the #VATsTheProblem campaign, which says the current tax burden is contributing to closures and job losses. Signatories include Greene King, Fuller’s, JD Wetherspoon, Pizza Express, Wagamama, Marriott and Center Parcs, alongside chefs including Tom Kerridge, Heston Blumenthal and Angela Hartnett.

The campaign follows comments made by Burnham in February, when he was mayor of Greater Manchester, that he would “argue for a VAT rate more consistent with what you find in Europe”. More than 370,000 people have signed a petition calling for a 10 per cent hospitality VAT rate.

Kerridge said the sector needed action rather than further commitments, arguing that the tax particularly affects an industry with high staffing costs. “You can reclaim VAT on a product, but you can’t reclaim VAT on a person,” he said.

The businesses said a lower rate was needed as operators faced higher wages, energy and food costs. The letter warned that without changes, closures and job losses would continue, while arguing that a VAT reduction could support employment and high streets.

UK hospitality businesses currently pay VAT at 20 per cent, while France, Italy and Spain apply rates of 10 per cent and Germany charges seven per cent. The group attributes the comparatively high tax rate as a contributing factor to the sector's loss of around 100,000 jobs over the past two years.

The government has already announced a 20 per cent reduction in business rates for pubs, clubs and live music venues as part of a £100 million support package. Burnham said last week that ministers would consider wider changes to business rates for high street businesses at the 28 October Budget.

However, Burnham has warned that the government has limited room for further measures because of its financial position. “I wouldn’t want to promise the earth,” he said, describing the financial outlook as “difficult”.

The VAT campaign comes as ministers prepare changes to the pubs code, including measures intended to give tenants greater freedom over their leases and beer purchasing. A government review found fewer than 400 tenants applied for free-of-tie agreements between April 2022 and March 2025, with applicants citing cost and complexity as deterrents.

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