Fallow co-owner James Robson’s agreement to establish a Gulf outpost highlights how Britain’s hospitality tax burden is shaping expansion plans, as rights advocates raise concerns about protections for migrant workers in the United Arab Emirates.
The Guardian reported that Robson signed an agreement to open a Fallow outpost in the Gulf. He has identified the Gulf, East Asia and the United States as growth markets, and described East Asia’s work culture and tax system as more favorable than Britain’s.
Robson also cited the 25% main corporation tax rate and dividend taxes as reasons he questions taking business risks at home. The Guardian reported that UK hospitality VAT is 20%, compared with an average of about 12% for European restaurants and 10% on restaurant food in Italy.
Fallow’s London restaurant in St James’s Market serves about 1,000 people a day, according to the report. Other London food businesses have expanded in the region: Scott’s, Gymkhana and Park Chinois have locations in Dubai, while Isabel’s has opened in Abu Dhabi and Bread Ahead has expanded to Dubai.
Felix Jakens, Amnesty International UK’s director of campaigns, said migrant workers make up most of the UAE’s population. He said employer-linked sponsorship rules can leave workers exposed to abuse, and that they cannot form trade unions. Jakens urged British companies expanding in the Gulf to pay staff fairly and give them a way to raise concerns without risking their jobs or visas.
The Guardian also reported that conflict-related disruption has affected Dubai, where some restaurants are struggling. It said chefs are calling on Andy Burnham to use next week’s budget to cut VAT.
