UK hospitality's VAT petition reached Downing Street with 401,250 supporters. The government has priced a 10% rate at £11 billion a year.

TL;DR

• UKHospitality (the UK hospitality trade body) delivered its #VATsTheProblem petition to 10 Downing Street on October 14 with 401,250 supporters, asking for hospitality value-added tax (VAT) to fall from 20% to 10% before the Budget on October 28.
• HM Treasury (the UK finance ministry) put a 10% rate on accommodation and food and beverage at about £11 billion a year in June, but Prime Minister Andy Burnham publicly backed a lower rate in February, so a cut is not ruled out.
• Independent hoteliers can decide their price rule before October 28, check how their booking systems would apply a new rate, and, if rooms are skipped, compare employer National Insurance and business rates with pre-tax profit.

UKHospitality delivered the #VATsTheProblem petition to 10 Downing Street on October 14 with 401,250 supporters. Chef Tom Kerridge spearheads the campaign, and its single ask is a cut in hospitality VAT to 10%.

HotelScaleUp reported in August that the campaign had passed 300,000 signatures, and the total has since grown by about 100,000. The Budget on October 28, Chancellor John Healey's first, is the next point at which the government can respond, and the price it has already put on the cut shows what he faces.

The government has put a 10% hospitality VAT rate at £11 billion a year

HM Treasury responded on June 19 to a separate Parliament petition, which closed with 16,111 signatures, that HMRC (the UK tax authority) estimates a 10% rate on accommodation and food and beverage would cost about £11 billion a year. The response says that would mean tax rises, spending cuts, or more borrowing elsewhere.

The same response said the government reviews taxes at Budgets and pointed instead to a temporary 5% rate on children's menu meals and eligible family attractions, which ran from June 25 to September 1.

The political position has shifted since that response, though no cut is promised

Three developments since June matter for the Budget:

• Burnham's first week as Prime Minister brought a 20% business rates cut for pubs that excluded hotels, HotelScaleUp reported.
• Burnham had publicly backed a lower hospitality VAT rate in February, before taking office, and more than 800 hospitality businesses wrote to him in September asking him to deliver it, ITV News reported.
• No Budget measure had been confirmed as of October 15, according to haysmacintyre (a London accounting firm).

A permanent 10% rate looks unlikely at £11 billion a year, and a targeted or temporary measure looks likelier, since that is the tool the government used this summer. Hotel rooms were not in that scheme, so relief of the same kind would probably miss them.

Only three European countries charge the standard rate on hotel rooms: Denmark, the Netherlands, and the UK

HOTREC (the European hospitality trade body) found in November 2025 that every country in its study except Denmark, the UK, and, from January 2026, the Netherlands applies a reduced VAT rate to accommodation. Rates on hotel rooms:

• Denmark: 25%, per HOTREC.
• Netherlands: 21% from January 2026, per HOTREC.
• UK: 20%.
• France: 10%, per the French tax authority.
• Spain: 10%, per the Spanish tax agency.
• Germany: 7%, per HOTREC.
• Portugal: 6% on the mainland, per the Portuguese tax authority.

The UK's 20% sits below Denmark and the Netherlands and above every reduced-rate country on that list.

Independent hoteliers need one plan for a VAT cut on rooms and another for no change

Independent hotels in the UK charge 20% VAT on rooms, and nothing changes for them until the Budget on October 28. The useful preparation is deciding now what to do in each case.

• If the Budget cuts VAT on rooms, set your price rule first. Either hold the guest price and keep the saving, or lower it and pass the cut on. On a £150 room rate before VAT, a guest pays £180 at 20%; at 10%, holding £180 leaves you about £163.64 before VAT, £13.64 more a night, while passing it on drops the guest price to £165.
• If the Budget cuts VAT on rooms, check your systems second. A 2020 note from HotelTime (a hotel management software provider) said future reservations were recalculated automatically, but rate codes with their own VAT setting had to be edited by hand. Ask your booking engine, channel manager, and property management system provider how they would handle a change.
• If the Budget skips rooms, work on the costs you can measure. HotelScaleUp's October 12 analysis shows how to compare employer National Insurance and business rates with pre-tax profit, and which rates multiplier applies to a hotel in England.

The petition shows how many people want a cut, and the £11 billion estimate shows what the Chancellor would have to find to grant it.