2026 could be the year of the restaurant recession unless something is done
We’ve always been vocal about the need for better government support for the hospo industry. As part of our #TaxedOut campaign ahead of the Budget last year, we wrote an open letter to Rachel Reeves, signed by 50 chefs, operators, writers and industry voices; we broke down the figures behind some of London’s most popular dishes to show just how razor thin the profit margins truly are; we spoke to independent operators to explain the realities faced by many restaurant owners; and we hosted an event at KERB to demonstrate to consumers how little restaurants actually take home.
Sadly the situation is only worsening in 2026. Hospitality is the third largest employer in the UK but operators are contending with rising taxes in a labour intensive industry. Employer National Insurance contributions increased in 2025, there’s been a big jump in Business Rates this year, and the VAT rate of 20%, more than double the average for the EU, is pushing restaurants to the brink. That’s why Tom Kerridge is leading the VAT’s the Problem campaign, a petition for the government to lower the rate of VAT for hospitality to 10% to reduce the cost pressures faced by the sector.
Last night we hosted a panel with Tebi, featuring Tom Kerridge, Ravneet Gill, Thomasina Miers and Lewis Bassett, discussing the pressures that hospitality is facing right now, the importance of the sector as an employer, and why a reduction in VAT to 10% is a fair ask. This isn’t just about restaurants saving money, this is about them surviving.
Why should you care? Because if restaurants, cafes, and bars disappear, the high street dies and that means the community in your local area, as well as job opportunities for young people, die as well. Most people start their working life in hospitality (we know we did) and jobs like these are a lifeline for so many people. It’s an industry that doesn’t rely on academic achievements, it welcomes people from all backgrounds and it’s possible move up the ladder fast – not many other industries can say that.
