‘Industry on its knees’: Dean Banks launches 20% VAT awareness discount

Chef Dean Banks gave diners 20% off their meals in a bid to highlight the mounting pressure VAT is placing on a sector which he says is “on its knees”.

Banks, who owns five restaurants including Haar in St Andrews and 1925 at the Pompadour in Edinburgh, offered the discount at all five of his restaurants at the weekend to start a conversation about how VAT affects pricing in the industry.

Speaking to The Caterer, Banks said: “I wanted to do something to try and raise awareness on it, so people can start talking about it.”

He argued that while some claim VAT is simply a customer tax, businesses are the ones responsible for managing it. Operators must complete quarterly returns, cover currency charges and absorb card transaction fees, averaging around 1%, meaning the administrative and financial burden ultimately falls on the business.

“All these tax hikes; I speak to so many of my colleagues in the industry and we’re just not making money for ourselves. They’re running at a loss. They’re breaking even, and taxes are up even further,” he added.

Banks said while he was happy to pay tax, it works differently with VAT on food; when operators buy food from suppliers, they don’t pay 20% VAT on it, but when the food is sold to customers, 20% VAT is often added to the price.

Banks is calling for VAT to be cut from 20% to 10%.

He said customers were “very supportive” of the weekend scheme: “They love the fact that I’m raising awareness and getting people to talk about it.”

He added that VAT is only one part of a much bigger challenge facing Scottish hospitality, alongside rising business rates, higher energy bills and increasing labour costs.

Banks said he wants to revive the scheme while politicians are engaged during Scottish election season in the hope of sparking wider UK debate: “I want to keep on doing it because I feel [at] the next UK election there needs to be a big change for the industry, because the industry is on its knees.

“We’re crying out for help. It’s not because we’re just being greedy buggers. We’re crying out for help.”