The boss of the company that operates two bars in the heart of Aberdeen city has urged the government to reduce the VAT on hospitality venues.
Rob Pitcher, CEO of Revolution, made this request as his company, which owns Aberdeen’s Revolution and Revolucion de Cuba, saw a loss of £28.4 million in the last year, which is nearly twice as much as their losses in 2023.
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These losses, which were shared with investors this morning, come after a difficult period for the company.
It has been trying to bounce back from the effects of the pandemic and has also faced challenges due to changing views on alcohol among its main customers aged 18 to 30.
The company put together a restructuring plan last month that brought in £12.5 million in new funds to help get the business growing again, but which would also see the closure of a number of its bars, including those in Inverness and Edinburgh, but Pitcher believes that the hospitality industry also needs more help from the government to get back on track.
The implementation of bus gates, road closures, Low Emission Zones (LEZ), and a shortage of taxis have created additional barriers for people considering visits to Aberdeen’s city centre, further exacerbating the challenges faced by hospitality businesses.
Rob commented: “We look to the new government to demonstrate their support for the hospitality industry and to enable us to become an engine for growth for the wider economy.”
“This needs to happen via significant business rates reform to support the high street and specifically hospitality, whilst also looking to refresh the apprenticeship levy to allow for more training and development across the industry.
“Longer term we need a competitive rate of VAT for hospitality in comparison to our European neighbours, who benefit from much lower rates, as this will allow us to drive even more economic growth for the country.
“The new government needs to recognise these challenges, which are not unique to our business, and reduce the burden of tax on the hospitality sector.
“For the sector to deliver economic growth and employment, further support should be offered to hospitality through reduced VAT and business rates support measures for companies of all sizes.”
Pilcher’s plea aligns with broader industry efforts to secure VAT relief. A recent petition, launched by hospitality entrepreneur Andy Lennox, called for a reduction of VAT to 10% for hot food, soft drinks, events, accommodation, and visitor attractions.
Despite the industry’s pleas, the government has so far maintained its position on VAT rates. In response to previous petitions, the Treasury cited the significant cost of VAT relief and the need to strengthen public finances. However, with the Spring Budget approaching and the UK officially in recession, there is renewed hope among hospitality leaders that the Chancellor might reconsider this stance.
