Research: Hospitality VAT cut could provide £6bn spending boost

By Hamish Graham

Published: 28 October, 2026

Fresh analysis from card machine provide Dojo suggests a cut to VAT could unlock a £6.28bn spending boost for the UK on-trade.

The research compared hospitality sales in the UK and the Republic of Ireland, respectively, from the period April to September 2026.

The Irish government introduced a VAT rate cut (from 13.5% to 9%) in July of this year, with a 6.17% post-VAT cut rise seen in the Republic. Over the same period in the UK a 1.85% uplift was seen.

Read more: Paragon Brands adds Irish whiskey liqueur brand Shanky’s Whip to portfolio

The growth seen in Ireland is higher than the country’s typical hospitality sales growth rate of 3.9% for the July to September period.

Analysing anonymised customer spending data from hospitality businesses, Dojo research estimates that there could be a £147.7m increase in monthly customer spend for UK on-trade businesses (or £6.28bn annually). This is equivalent to a £2.48 per person monthly spending increase.

Big four accountancy firm PWC also revealed that hospitality insolvencies were down 23% in the Republic of Ireland following the July rate cut.

Head of research and insights at Dojo Charlie Ashworth commented: “As the Autumn Budget approaches, we hope these insights will help to demonstrate the positive impact a VAT cut could have in helping to protect the UK’s hospitality sector and unlock its potential to thrive.

“Hospitality is one of the few sectors in the UK that creates jobs in every community. Yet, in the last two years, nearly 100,000 have been lost as energy and food costs have risen, customers’ disposable income has declined, and policy choices have put the industry under huge financial pressure.

“That’s why we’re proud to be backing the #VATsTheProblem campaign, as the UK’s hospitality sector and its supporters push for the changes it needs.”

Printer friendly version