London’s top restaurants have joined forces to issue a plea to Theresa May to address the perfect storm of difficult trading conditions caused by rising business rates and the aftermath of Brexit.
In an open letter published in the Evening Standard, chief executives of 23 companies including Leon, London Union, Living Ventures, Wagamama, the Casual Dining Company, Pizza Express, Wahaca, Yo! Sushi and Carluccio’s, have also asked for reassurances on retaining EU workers after the UK leaves the Union.
Business rates, which will increase from April, are the biggest concern, with some of the letter’s signatories reporting rises up of to 50%.
The letter states: ‘We know Theresa May appreciates the contribution of the hospitality industry but we are not sure the Government understands the commercial pressures we face. We pay millions of pounds in VAT, business rates, national insurance and other taxes. In other countries, taxes are cut for the hospitality sector.’
Calling for a reduction in VAT, an extension on transitional relief on business rates or a reduction in national insurance contributions, the group continued: ‘The weak pound has led to food costs increasing by about five per cent. Those of us with central London sites have seen rents soar and an increase of 30-40% in business rates.
‘Our industry is also penalised because restaurants and pubs have to charge 20 per cent VAT. The Government also wants a new apprenticeship tax and increase the National Living Wage to £7.50 next year and towards £9 by 2020. We back this — we want to pay our people well. However, labour costs represent around 30 per cent of our revenue and we need balance elsewhere in the tax regime to do that.’