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Tampopo speaks out

David Fox of Tampopo thinks the VAT rises in the budget will be ruinous

Published on September 13th 2010.

Tampopo speaks out

According to David Fox, boss of Tampopo, from January 2011 if you visit any of Tampopo restaurants nearly 25p of every £1 you spend will go to the Inland Revenue. That is before the company makes any money and before any duty on alcohol.

There is absolutely no doubt that if VAT rises there will be less opportunity for growth in the food and drink sector.

Fox says, “We pay more to the Inland Revenue than we pay to our food or drink suppliers, or even to our staff in net wages. The Inland Revenue is the number one beneficiary of us opening our doors.”

The East Asian noodle-bar specialists had sales for the year to June 2010 of £6.4 million. Total revenue including VAT was £7.5 million. £1.7 million of this will be paid to HM Treasury. This will rise to nearly £1.9 million with VAT going up to 20%.

“VAT rises,” says Fox, “need to be considered in the context of how much additional revenue will be offset by a business going under or cutting back investment because of lack of cash. If the equivalent of one in thirteen businesses decided to close the government would not raise a penny more in tax revenue – that is before considering the cost of staff being out of work.”

“I thought that the Conservatives were a low tax party,” he says scornfully. “There is absolutely no doubt that if VAT rises there will be less opportunity for growth in the food and drink sector. I am happy to pay tax on profits, but less so when before I have made a penny I already pay 25p in every £1 over the till. I’m uncomfortable that we have sleepwalked into this hidden tax.”

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16 comments so far, continue the conversation, write a comment.

AnonymousJune 22nd 2010.

This guy will not be paying a penny in extra VAT. He will be able to reclaim the VAT he spends himself and will no doubt pass the price rises to customers. If a dish's net price was £9, then it's current net rate would be £10.58 and the new one £10.80. Not much difference and whilst no one, the general public included, will be relishing this rise, it's obviously needed. Nevertheless, Tampopo is brilliant and probably the best place to dine with kids in Manchester.

DescartesJune 23rd 2010.

Now now.... VAT is going to be 20%, so *exactly* 20p from every £1 spent at Tampopo will be tax, not "nearly 25". But I guess it's not worth getting angry about unless it's a quarter of a pound is it?

What was VAT before, 17.5%? So Mr Fox believes that adding 6.5p per dish (or probably about 60p per meal) is going to ruin his business?

What would he suggest as an alternative? Our economy is in the worst state it's been in since the 20's, serious and immediate action needed taking to sort this out and whilst I deplore any rise in tax, we need this.

And besides, like anon says, businesses will most likely just raise prices by 6.5% to protect there profit, that's how it usually works, and I'll gladly pay that at Tampopo because it's ace.

AnonymousJune 23rd 2010.

I've got some random stuff to say that's utterly pointless to read, can I have some column space too? What a complete none story.

AgricolaJune 23rd 2010.

Well don't read it then, or stop half way through. Bless Anon, do you buy a newspaper and have a little row with yourself every time you don't like a story, chunnering, what stuff and nonsense to yourself. So you didn't like the article and then you wasted your time telling us?

AnonymousJune 23rd 2010.

I don't generally read news papers Agricola as I prefer my news to actually contain news (with the exception of a bit of a habit with the Sunday Times).

I love this website and tend to read everything because it's all fun and interesting to read. I commented on this because it's the kind of filler that stopped me reading the MEN all those years ago, I don't want Manchester Confidential to go the same way they did.

NortherngeezerJune 23rd 2010.

Wonder if Mr Tampopo paid for the free advertising?

SpudJune 23rd 2010.

The first anonymous poster doesn't understand how VAT works and has stated the common myth that Mr Fox will be able to reclaim all the VAT he pays. He won't. There are very few businesses that can claim back all the VAT. There is always a difference in input and output VAT. Increased VAT means an increase in drinks and food in pubs, bars and restaurants as well as other retail sectors. This will mean more businesses going under as people choose to eat or drink at home.

Mr Fox is also an unpaid tax collector like all VAT registered businesses.

Jonathan Schofield - EditorJune 23rd 2010.

Actually he said I have these thoughts what do you feel? And I said we'll slam 'em up, it'll be interesting to get a restaurateur's perspective. No money changed, there was no illegal ramen dealing down back alleys.

NortherngeezerJune 23rd 2010.

Anybody got an answer to the 'angle of dangle' theory?

Tampopo DavidJune 23rd 2010.

The point I was making that if you spend £10 at Tampopo, I will pay £2.50 of that directly to the Inland Revenue. Part is VAT and part is PAYE/NIC I deduct from Tampopo staff. For example our express menu at £6.95 (shamelss plug I know), we will pay £1.74 of this to the Inland Revenue which leaves us £5.21 to pay for everything else. All good fun.

AdJune 23rd 2010.

Boo bloody hoo. A 2.5% rise in VAT is naff all. Get over it.

EmsibobsJune 23rd 2010.

Surely the decrease in corporation tax of 4% over the next 4 years will be of some assistance Mr Tampopo??

NortherngeezerJune 23rd 2010.

I told you free advertising came in to this somewhere!!!! but your right Mr Tampopo, your express menu is truly excellent.

AD (not the above)June 23rd 2010.

I would think this could be the making of tampopo. when times are hard people look for cheaper options and tampopo is a cheaper but very chearful dining option. I would think now might be the time to invest in the business and watch more expensive rivals fall by the wayside.

Tampopo DavidJune 23rd 2010.

Well thank you. All our investors are people (not corporates) and many are regular customers from Manchester!

Scott NeilAugust 23rd 2010.

was in London last week. gutted to see Tampopo's Fulham branch has closed. tough market i suppose.

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