London dining firms target Gulf growth

The United Kingdom maintains a value added tax rate of 20% on hospitality services, a level that stands well above the European average of 12%. Several high-profile London restaurants are now opening branches in the Gulf to address this cost structure and capitalize on regional growth opportunities.

James Robson, co-owner of Fallow in St James's Market, recently signed a deal to establish an outpost in the region. Fallow serves 1,000 customers daily and has built a following of 650,000 on Instagram through dishes such as a whole cod's head in spicy butter. Robson identified the Gulf, East Asia, and the United States as primary targets for expansion while speaking from Hong Kong.

He described the UK tax environment as a "tax tsunami." Robson noted that the Gulf actively assists businesses, whereas the UK has imposed what he called "multiple anti-growth taxations" in recent budgets. He specifically pointed to a 25% corporation tax rate and dividend taxes of 40% or more. Chefs are urging Chancellor Andy Burnham to lower the VAT rate in the upcoming budget.

Other prominent establishments have already moved to the region. Scott's of Mayfair has opened in Dubai, along with the two Michelin-starred Gymkhana and the Chinese venue Park Chinois. The bakery Bread Ahead also expanded into Dubai, while the Mayfair restaurant Isabel's opened a location in Abu Dhabi. These openings occurred despite earlier conflict in the Middle East, which temporarily affected some venues like Dinner by Heston.

Jason Atherton, a Michelin-starred chef, now spends a third of his time managing his Dubai restaurant. He stated that making a profit is easier abroad than in London. Robson, who said he is proud to contribute to the UK deficit, argued that domestic growth no longer offers a sensible balance of risk and reward. He is therefore maintaining a safe base at home while focusing new investments overseas.

Felix Jakens, director of campaigns at Amnesty International UK, urged caution regarding the expansion. He noted that the UAE has a poor record on worker rights and labor protection. Migrant workers, who make up the majority of the UAE population, are bound by a sponsorship system that ties them to their employers and denies them the right to form trade unions.

Jakens warned that the UAE's spending on its UK image, including its association with Manchester City, should not obscure how workers are treated. He called for UK businesses entering the Gulf to conduct proper human rights due diligence. This process should ensure kitchen staff are paid fairly and can raise concerns without fearing the loss of their job or visa.