Luke Johnson criticises ‘huge burden of taxation' on hospitality

15 November 2012 by
Luke Johnson criticises ‘huge burden of taxation' on hospitality

Restaurant investor and former Pizza Express chairman Luke Johnson, has criticised the "huge burden of taxation" on the hospitality sector, and applauded efforts to reduce it.

Johnson, who will speak at the Arena Christmas Lunch on 3 December in London, said: "The sector as a whole is a vast contributor to the Exchequer and continues to create jobs in an economy that creates hardly any."

"I really applaud the efforts of Tim Martin [founder and chairman of pub company JD Wetherspoon] and others for pushing the idea that we pay too much tax generally.

"I think the industry has been transformed in terms of what we offer, the choice, and the variety from ten or 20 years ago. But I also think that we suffer a huge burden of taxation which is disproportionate."

Martin is a prominent supporter of Jacques Borel's VAT Club, which has around 30 supporters in the pub and restaurant sector and is calling for a reduction in VAT from 20% to 5% for the whole hospitality industry.

Meanwhile the British Hospitality Association has over 300 supporters in its bid to reduce VAT to 5% on accommodation and attractions.

Both groups are campaigning in the face of rising VAT rates across Europe. France announced recently that its middle rate of VAT, which applies to restaurant food and hotel accommodation sales, would climb from 7% to 10% in 2014. However the rate is still significantly lower than the full rate of 20% paid on equivalent sales in the UK.

And Johnson said campaigners could still achieve a reduction in taxation for the sector if they persevered. "If you talk to Jacques Borel he says it is not a short-term thing, it is going to take years and I think he is probably right. You just have to keep nagging away, and not give up," he said.

  • Look out for the full interview with Luke Johnson in Caterer and Hotelkeeper on 23 November.

  • The Arena Christmas Lunch takes place on 3 December 2012 at the Mandarin Oriental Hyde Park. Tickets cost £135 plus VAT forArenamembers and £175 plus VAT for non members. For further information and to book tickets, contact Lorraine Wood 02030872378.

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