An award-winning chef has warned that more Scottish restaurants will close if immediate action is not taken to tackle their ‘unsustainable’ 60% tax burden.
Ajmal Mushtaq says that restaurants which serve hot food are currently paying a total of 60% tax through a combination of charges, including VAT, business rates, alcohol duty, national insurance, corporation tax and PAYE.
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The chef director of Mushtaqs Indian in Hamilton claims the Government is doing nothing to tackle the ‘huge tax burden’ and says that rates need to be reduced to around 40% if restaurants are to continue to survive.
He has already carried out six months of research into the issue and is currently preparing to publish his findings.
Mushtaqs scooped the best delivery restaurant/take-away award at the eight annual British Curry Awards on Monday. The awards celebrate the achievements of the UK curry industry.
Ajmal said: “The restaurant sector has taken a battering in the last two to three years but it’s not the recession, the real reason is that the tax burden on a lot of restaurants is in the region of 60%. That is unfair and unsustainable.
“The Government is doing nothing. They need to make this a priority.
“Restaurants are closing right, left and centre, faster than they ever have done in the past. This is now a very serious issue that’s costing a lot of jobs.
“The Government are very good at saying they want to create jobs, yet they need to help businesses to be sustainable so that the businesses can create the jobs that they are seeking.
“Restaurants will continue closing and the rate of closure will start to accelerate, no doubt.
“The Government needs to act now, they need to take a holistic view of the sector, they need to appreciate that 60% tax is unsustainable, unfair and unreasonable and they need to get their act together on this very quickly.”
A spokesperson for the Treasury said:“The Government is committed to creating a tax system that supports UK competitiveness, reduces the burden on business and incentivises investment and enterprise.
“We have doubled the Small Business Rate Relief, reduced both the main rate and small profits rate of corporation tax, and significantly reduced red tape and administrative burdens for small businesses.”