The French government has negotiated a major cut in the rate of VAT paid on restaurant meals in France, but there is little likelihood that UK restaurateurs will enjoy the same benefit.
Although the European Commission is working to harmonise tax rates across Europe, France has successfully argued for an exemption for its restaurateurs. The VAT on French restaurant bills will thus be slashed from 19.6% to 5.5%.
"There is no chance of that in the UK. The industry has asked for it over and over and over, and it keeps getting turned down," said David Harrold, chief executive of the Restaurant Association.
He added: "The Government has considered reducing VAT on hotel accommodation but has never indicated that it has looked at a reduction on VAT on restaurant meals. If we are being practical, the Government is searching for extra money rather than giving it back."
Britain's 17.5% VAT rate on restaurant meals is one of the highest in Europe.
Source: Caterer & Hotelkeeper magazine, 24 - 30 July 2003