Scottish chef Dean Banks cuts food bills to show true cost of VAT
Like so many in the sector, he was hoping to see a reduction in the 20% VAT rates demanded on hotels in this week’s government budget, but says he is “not surprised” that calls for help have been once again “ignored”.
“It’s so frustrating,” he said.
“We started out hoping things would make sense, but we should have known better.
“No one is asking for help from the government, we were just looking for some form of relief.
“I think what the public needs to understand is that even with a 10% discount, business owners are not going to go out and buy Ferraris or book vacations.
“That 10% would literally be enough to keep some places in business or allow them to invest in their businesses and staff.”
Every Friday in March, Banks plans to offer customers 20% off their food bills to clearly demonstrate what hospitality companies are paying to the government.
He said: “We do not pay VAT on the purchase of food, however, we have to pay VAT on the sale of food, so it is a closed loop that no longer works for our industry.”
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While his establishments will of course “pay their VAT bill” on all food sold, the plan is to show diners “what a difference 20% makes”.
He continues: “VAT is on our receipts, but not everyone will take the time to look at that at the end of a meal.
“I had been thinking about introducing a menu similar to those found in America, with the standard prices and VAT next to it, and then the total on the bill, just to show everyone the actual amount we take .
“Take for example our selection of fine wines, of which we are very proud.
“If we sell a bottle for £35, then £7 will go straight to the government.
“In this industry, we are constantly trying to think of new ways to increase sales, but the more we insist, the more profit the government gets.
“The next step for us will have to be to increase our prices in April, but we want to make it very clear that this is not our choice.”
Mr Banks is keen to stress that his calls for support are “not about party politics”, and instead hopes that using his platform will help give a voice to small, independent businesses in Scotland as they fight to stay in business. flow.
He said: “This is all getting heavier and heavier.
“There are times when you see this bill and you wonder if you can continue, so I understand why my colleagues are leaving the profession.
“VAT at 20% is difficult, but it is only a small part of the costs we face.
“The minimum wage is increasing, food prices are increasing, and utility bills have sometimes increased by almost 500%.
“When your utility bills exceed your rent, it becomes very difficult to budget.
“I think the time has come for the government to step in and help the industry this week.
“We came together to ask for help and we received none.
“I can’t predict what will happen in the next six months, but I think people will be shocked by the closures that will inevitably follow.”
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Although a difficult road lies ahead for the hospitality industry, Banks said there is still hope for businesses with the continued support of local communities who value their services.
He said: “When the hospitality industry does well, it benefits the Scottish economy as a whole. So I don’t understand why the VAT reduction is not considered an investment in the future of the country.
“For now, your favorite businesses are still operating.
“I understand that people have less money due to the cost of living crisis and that their own utility costs and supermarket prices are increasing.
“But if you have the opportunity and the money to spend, now is the time to get out and support your local pub, restaurant or cafe.
“If you don’t, they could soon disappear. »
A Scottish Government spokesperson said: “The Scottish Government recognizes that the VAT scheme can be used to support businesses facing cost increases.
“The power to set VAT rates is reserved to the UK government. Ahead of the UK’s Spring Budget, the Deputy Prime Minister called on the UK Government to reinstate a reduced rate of VAT for the tourism and hospitality sector.
To book for VAT Free Fridays, select a table using the word “VAT” in the online comments section.
TOffer only applies to food bills at Dean’s Banks at Pompadour, Dulse Edinburgh, Haar St Andrews and Dune St Andrews.
