Pub landlords, hoteliers, restaurateurs and local attraction operators are among the business owners calling for the tax to be reduced from 20pc to 10pc.

The UK currently has one of the highest rates of VAT for hospitality in Europe, with the tax being added to most goods and services sold by businesses, including food, drink and accommodation.

The standard VAT rate in the UK from its introduction in 1973 to 2026 (Image: Supplied)

Bosses say that cutting the tax would increase their margins, enabling them to invest in growing and improving their businesses, creating jobs and a better customer experience.

They say that lowering the rate would allow them to bring down their prices, making it more affordable for people to eat and drink out, visit attractions, and book overnight stays.

The hospitality industry continues to come under pressure from a raft of taxes, including hikes to national insurance contributions and business rates in the last year, as well as rising energy bills and employment costs.

Approximately 3.5 million people work in hospitality in the UK.

In Ireland, the government has agreed to cut VAT on food‑led hospitality, including restaurants, cafés and catering services. From July, the rate will be reduced from 13.5pc to 9pc.

Elsewhere in Europe, Germany has permanently reduced VAT on food served in restaurants from 19pc to 7pc, aligning it with takeaway and delivery food.

Marcus Pearcey owns more than a dozen hospitality venues in Norfolk, including pubs, bars, bakeries and cafes.

The businessman has backed a campaign calling for the government to reduce VAT for hospitality firms to 10pc.

Marcus Pearcey owns more than a dozen hospitality venues in Norfolk, including Kerry's bar in Queen Street, Norwich (Image: Denise Bradley)

“The industry is really struggling at the moment," he said. "It's relentless.

“VAT on hospitality needs to come down to 10pc as 20pc is just not sustainable.

“That’s our margin, which is being eaten up at the moment.

"I want to get the industry moving; to employ people, to invest, and to drive it forward.

"It’s about trying to build this industry up and keep it sustainable to protect its future."

'EATING INTO MARGINS'

Phil Cutter, landlord of the Murderers pub in Norwich, said the current rate of VAT in the UK is a "massive contributor to why so many hospitality businesses are failing at the moment".

Phil Cutter, landlord of the Murderer's pub in Norwich's Timber Hill (Image: Supplied)

"It's a huge burden on businesses," he said.

"We're having to put our prices up just to maintain margin, but it's now getting too expensive for people to go out to eat or drink.

"For every pound that is spent across the bar, 20p of that is VAT. Obviously, it is offset, but when it comes to food, the food we buy in we don't pay VAT on because it is VAT exempt, but when we sell it as a meal, every meal has 20pc added on, which has to be factored into our price margins."

Mr Cutter said the government needs to change its view of the country's hospitality sector, or risk thousands of closures and job losses.

Phil Cutter, landlord of The Murderers pub in Norwich (Image: Supplied)

Earlier this year, he joined a nationwide campaign backed by more than 1,000 landlords banning Labour MPs from their pubs in response to the government's changes to business rates for hospitality, announced in last November's budget.

Businesses face a steep rise in rates this year due to a combination of a revaluation of the rateable value of properties and the end of the 40pc Covid-era relief on rates for hospitality this month.

A government U-turn saw pubs and music venues given a 15pc discount on their business rates bills - but the relief was not extended to restaurants, hotels and the wider hospitality sector.

However, Mr Cutter said the 15pc discount is "just a sticking plaster on a gaping wound" for the country's struggling pubs.

He also said the minimum wage going up again earlier this month is costing the pub an extra £500 a week in wages.

Phil Cutter, landlord of The Murderers pub in Norwich (Image: Supplied)

"At the speed that pubs are currently closing, by 2045 there won't be any left," he warned.

"Pubs have probably lost about 100,000 employees over the last 18 months, and we're now in a position where hospitality businesses are closing at a faster rate than they were during Covid.

"It is ludicrous to consider that we were more profitable when we weren't trading than we are when we're open.

"The government really aren't listening to us, and a change of view of hospitality is needed across the political spectrum."

The Conservative government introduced a temporary reduced VAT rate for the hospitality and tourism sector during Covid to support businesses through the pandemic.

The rate was cut from 20pc to 5pc from July 2020 to the end of September 2021, and then to 12.5pc from October to March 2022.

The standard 20pc rate returned in April 2022.

Goymour Group runs the dinosaur adventure park ROARR! at Lenwade.

Director Adam Goymour said 2021 was the park’s second most profitable year on record, behind only 2016, and its best year for visitor numbers since Covid.

Adam Goymour, director of Goymour Group (Image: Supplied)

"VAT was down, which allowed us to reinvest in the product and charge ahead with plans," he said.

"A reduction in VAT would help us to recover the exorbitant costs that we've been charged for the last two years.

"We've now got £200,000 of extra cost per year on our bottom line that we've got to try and cover."

Goymour Group, which also runs Applewood Hall and Countryside Park caravan park and campsite at Banham, employs 300 people during its peak summer season.

Mr Goymour said the minimum wage going up this month will cost the group an extra £40,000 annually, on top of the £160,000 that increases to national insurance added to overheads last year.

He said that while he has been forced to put prices up across the group, a future reduction in VAT would not necessarily mean businesses would automatically bring their prices down for customers.

"It's not as straightforward as just charging customers less," he explained. "We've still got all of those other costs to cover.

"I would rather reinvest the money back into the business to create a better experience for customers, using the local workforce and local companies to do so."

© Norwich Evening News