Local business owner supports campaign to reduce hospitality VAT
A LOCAL hospitality business owner has backed a national campaign to reduce VAT on the sector as costs to continue to rise “across the board”.
Celia Smith, of Blyde Welcome, was speaking with Shetland News in reference to a petition created by chef and publican Tom Kerridge, who has called for VAT on hospitality businesses to be reduced from 20 per cent down to 10 per cent.
The petition currently has more than 170,000 signatures.
VAT, or value added tax, is a tax added to most products and services sold by VAT-registered businesses in the UK.
Kerridge said the majority of European countries understand the value of hospitality businesses and support them with lower VAT rates.
The petition’s website says VAT in France, Spain and Italy is 10 per cent, while in Germany it is seven per cent.
Smith, who said she does not want to make things party political, said she shared the campaign because people will sometimes see a busy cafe or restaurant and “assume everything must be fine”.
“But the reality behind the scenes is very different,” she said.
“Costs have risen across the board, VAT remains at 20 per cent, and small hospitality businesses are trying to absorb as much as they can without pricing out their customers.
“In Shetland, where we already have the additional costs of being an island community, that pressure is very real.
‘Everything costs more to get here, and small businesses don’t have the same buying power as bigger chains. When costs go up, we can’t simply keep passing that on to customers, because people are feeling the squeeze too.”
Smith also said that hospitality “brings life” to communities, as well as creates jobs, supports local suppliers and gives people places to meet.
“Once these businesses are gone, they’re very hard to replace,” she said.
Leading economic research organisation the Fraser of Allander Institute said in December that hospitality was the third largest employment sector in Scotland.
In the second quarter of 2025, for example, the Scottish hospitality sector supported £1.9 billion of economic activity and 243,000 workforce jobs.
It comes after the UK Government recently announced a temporary VAT cut on certain activities this summer in an attempt to reduce the cost of living for families.
The reduction on “summer attractions” will see VAT drop from 20 per cent to five per cent on activities like theme parks, museums and cinema tickets.
As a result ticket prices for children in Mareel are set to drop slightly over the summer.
Become a member of Shetland News
Shetland News is asking its readers to consider paying for membership to get additional perks:
- Removal of third-party ads;
- Bookmark posts to read later;
- Exclusive curated weekly newsletter;
- Hide membership messages;
- Comments open for discussion.
If you appreciate what we do and feel strongly about impartial local journalism, then please become a member of Shetland News by either making a single payment, or setting up a monthly, quarterly or yearly subscription.
Already a member? Sign in to hide this message.
