The founder of Leon, John Vincent, has expressed deep concern over the impact of Labour's tax policies on the hospitality sector. He argues that the current tax regime is 'incredibly toxic' and threatens to force many businesses to close, with Leon itself set to shut 20 sites following a period of heavy losses. Vincent claims that the economics of running a restaurant have become unsustainable under the current policies, with 36 pence of every pound taken by Leon going directly to the government, leaving the business with a 'negative 10p' after all costs are accounted for. He highlights a structural imbalance between restaurants and supermarkets, noting that food bought in supermarkets is not subject to VAT while food sold in restaurants is charged at 20%. Rising business rates and National Insurance contributions have added further pressure, increasing from around 4% of sales to between 8 and 10%, while profit margins in the hospitality industry traditionally operate around 3%. Vincent argues that these additional tax burdens have removed any realistic chance of profitability for many operators. Despite the challenges, Vincent maintains that his approach to business continues to prioritize values over profit, insisting that companies focused solely on making money often perform worse in the long term. He sold the business to petrol station billionaires Mohsin and Zuber Issa in 2021, but bought it back in October after it had been losing around £10 million a year. Leon has now appointed administrators to oversee a Company Voluntary Arrangement, allowing the company to proceed with the planned closure of 20 restaurants. Vincent warns that only certain types of businesses will be able to survive under current tax policies, and that quality-led operators will struggle to compete under the existing cost structure. The Chancellor is urged to extend reported business rate reliefs for pubs to the rest of the hospitality industry.
