Hospitality sector needs help not threats – business owner
Lincoln’s fragile hospitality sector is teetering on a knife edge and needs help from the government, according to a local business boss.
Nick Peel, Managing Director of Stokes Coffee and Tea (pictured above) has written an open letter berating the government for ‘suffocating’ small, independent hospitality ventures with restrictive policies that larger conglomerates can avoid.
Nick said he had written the letter because he felt new rules and fines in the VAT system could be the final straw for businesses, which already felt fragile due to increased costs across the board.
“What winds me up is that compliant businesses get absolutely hammered … while big multinationals structure themselves in ways that massively reduce what they pay in the UK,” said Nick.
“The Government uses threats and fines instead of any kind of support.
“For example, Starbucks is registered in The Netherlands, so it pays practically nothing towards the UK infrastructure as it has internal accounting which gets rid of any profit in UK. It’s a legal loophole which the Government knows about and needs to address.”
We have published Nick’s letter in full below – it is being widely distributed to MPs, local authorities and business representative organisations.
Do you agree with Nick? Send your views to
I am writing publicly as the Managing Director of Stokes Coffee and Tea, an independent Lincoln business that has traded since 1902 in coffee wholesale and hospitality.
For 124 years, through wars, recessions and national crises, this family business has survived. Today, I am questioning whether continuing to trade in hospitality makes economic sense.
Hospitality is not failing because customers have disappeared or because operators are incompetent. It is being suffocated by policy decisions that remove any possibility of breaking even for these labour-intensive, bricks and mortar businesses.
Rising wage costs, increased employer National Insurance, high business rates and extortionate energy costs have combined to create an environment that is completely unsustainable, with absolutely no sector-specific support on offer
We operate entirely by the book and always have done.
We pay our taxes. We comply with regulation, employ local people, train young staff and we support local suppliers. Stokes is a certified B Corp business - therefore we actively choose to operate responsibly and ethically, and we contribute significantly to Lincoln and the UK’s economy. For every £1.00 we sell, 25% is paid in taxes to central government, local taxes such as rates and levies are on top.
Instead of supporting businesses, they do the exact opposite - for example, HMRC’s newly introduced points-based VAT system, means that fines and penalty points can be issued and remain on record for two years for those businesses that cannot quite make payments by deadline. There is zero flexibility offered to businesses. Zero recognition of seasonality.
Meanwhile, multinational corporations such as Starbucks and Amazon have historically structured their UK operations in ways that result in minimal tax contributions. Their tax arrangements and use of loopholes in the system have been widely reported.
Why is the government not tackling this head on with the same urgency and inflexibility it applies to small independent operators?
This is not a level playing field, and enough is enough.
Across Europe, hospitality is supported. Germany applies 7% VAT to restaurant food. The Netherlands 9%. Italy 10%. The UK is moving in the opposite direction.
If businesses that have traded for generations are questioning survival, something is fundamentally wrong with the system.
This is not a plea for special treatment. It is a call for fairness across the industry.
The UK cannot afford to lose its independent hospitality sector.
Nick Peel
Managing Director, Stokes (est. 1902)
Lincoln