London Chefs Flee High Taxes for Gulf

Fallow in St James's Market serves 1,000 people every day, yet its co-owner is moving operations abroad. James Robson signed a deal this week to open a branch in the Gulf, citing a tax burden he describes as a tsunami hitting the UK hospitality sector. The move follows a pattern established by other high-profile London venues that have already relocated or expanded into the region.

The trend began before the recent conflict in the Middle East but has persisted despite it. Scott's of Mayfair opened in Dubai, as did the two Michelin-starred Indian restaurant Gymkhana and the Chinese venue Park Chinois. The Borough Market bakery Bread Ahead and the politician-favorite Isabel's, which opened in Abu Dhabi, also joined the list of London names with international branches. These openings continued even as the US-Israeli war in Iran caused some expats to leave Dubai and forced Dinner by Heston to close temporarily.

Robson is currently in Hong Kong, where he is evaluating new markets. He identifies East Asia, the United States, and the Gulf as his primary targets for growth. He argues that the US supports business, the Gulf actively assists investors, and East Asia offers a work ethic and tax system that contrasts sharply with the UK. He stated that the US champions business while the Gulf encourages and assists it, whereas East Asia has a work ethic and taxation system that puts the UK to shame.

The central financial complaint is the value-added tax on hospitality. The UK charges 20%, a rate among the highest in Europe where the restaurant average is about 12%. Italy charges only 10% on food sold in restaurants. Chefs are asking UK Chancellor Andy Burnham to lower this rate in next week's budget. Robson said the country sleepwalked into multiple anti-growth taxations in the last two budgets and expects more next week. He also pointed to 25% corporation tax and dividend tax of 40% or more, asking for VAT to be brought closer to European levels.

Chef Jason Atherton, who holds a Michelin star, now spends a third of his time at his Dubai restaurant. He says it is easier to make a profit there than in London. Robson said he does not resent paying UK tax and is proud to contribute to the country's deficit, but he argued that UK growth no longer offers a sensible balance of risk and reward. He said he is playing it safe at home and focusing overseas.

Human rights groups are watching the expansion closely. Felix Jakens, Amnesty International UK's director of campaigns, said the UAE has a very poor record on workers' rights and protection from labour exploitation. He noted that the UAE spends heavily on its UK image, particularly through Manchester City, but that this should not distract from how workers are treated. Migrant workers, who make up the majority of the UAE's population, remain bound by a sponsorship system that ties them to their employers and exposes them to abuse.

Jakens said these workers are denied the right to form trade unions. He urged any UK business expanding into the Gulf to carry out proper human rights due diligence. He said kitchen staff must be treated fairly, paid properly, and able to raise concerns without fear of losing their job or visa.