Scottish chefs shine spotlight on summer VAT cut with 'funfair restaurants'
Scottish chefs are reacting to the planning VAT cut for summer attractions, and are right to do so, says Rosalind Erskine.
It’s set to be a “bumper summer” for Scottish attractions according to the Federation of Small Businesses, as Rachel Reeves announced a VAT cut on tickets for theme parks, zoos and museums over the summer holidays. But what about other small businesses such as restaurants?
Last week the Chancellor announced VAT would be cut from 20 per cent to five per cent this summer on these attractions in a bid to ease the impact on the cost of living from the Iran war.
This VAT cut is exactly what many chefs and owners have been calling out for in Scotland for months. The move to help out attractions this summer has led to two leading Scottish chefs posting tongue in cheek pictures on social media.
Both chef Dean Banks who owns Haar restaurant in St Andrews and Dulse in Edinburgh, and chef Calum Montgomery, chef patron of Edinbane Lodge on Skye, both posted AI pictures of their restaurants as funfairs, to highlight the VAT cut.
Mr Montgomery wrote: “REBRAND: Edinbane Summer Attraction Lodge. Buy the ticket, take the ride on our multi-course dinner menu.
Enjoy all the fun of a great British summer attraction, including: A scenic journey through Skye; Foraging expeditions; Have loads of fun in one of our six guest bedrooms for the full overnight experience.
Tickets available now on EdinbaneLodge.com. 5% VAT ✅
While Mr Banks wrote: “@haarrestaurant rebrand this summer so we can access Rachel Reeves Great British Summer Savings.
“It's a step in the right direction offering 5% VAT to attractions. It would have been a tick box exercise to have helped Hospitality at this stage.”
Mr Banks has been campaigning for a VAT cut for restaurants for months. In February he offered 20 percent off meals at any of his restaurants as he looked to highlight how much of a food bill is added tax.
Speaking at the time of this promotion, Mr Banks said he is concerned many don’t realise why the complex rules around VAT on buying and selling food are such an issue, and hopes his ongoing social media videos will help alongside this deal.
He said: “The discount shows how much of every item we sell is not actually us charging anything – it’s what we are forced to add as VAT, then pay on to HMRC.
“Of course everyone pays tax and we are happy to do that – but it works differently with VAT on food. When we buy food in, there’s no VAT on it but we have to add 20 per cent VAT to sell the food to customers. Most businesses pay out VAT on the things they buy in and collect VAT when they sell on – so it balances out, bills are minimal or even owed a balance back.
“That doesn’t happen for us because of this weird rule on food, so it’s a massive stress with admin, cashflow, pressure and bad feeling because customers think it’s 20 per cent extra profit for us.”
While it’s a step in the right direction for attractions, with the Federation of Small Businesses (FSB) saying that the VAT cut: “could make the difference between surviving another year and being forced to pull down the shutters,” it’s yet another let down for our independent restaurants, some of whom will also be fighting for survival this summer.
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