I had to close my beloved restaurant. VAT was taking just too big a bite of the profits

I did everything right. The arithmetic still stopped working. After 13 years in food, I closed Sambal Shiok last week. A fairer VAT rate wouldn’t have saved me alone, but it would change the arithmetic for thousands still hanging on.

On 27 May I served the last bowl of laksa at Sambal Shiok, the Malaysian restaurant I ran on Holloway Road in north London for eight years. People assume a closure like mine is a failure of cooking, management or custom. It wasn’t. It was arithmetic that stopped working around 2022.

When Russia invaded Ukraine and the cost-of-living crisis began to bite, two things happened: customers’ spending power dropped and our operating costs went through the roof.

When I opened in 2018, a full Friday and Saturday was enough to make a good month. By the end, a busy weekend could still lose money, because the cost of putting that room together across the whole week – staffing, ingredients, energy, the fixed cost of simply being open – had climbed faster than anyone can reasonably be asked to pay for a bowl of noodles.

A bowl of laksa is mostly labour, and labour is the one cost VAT won’t let you escape.

The government automatically takes 20% if I make it from scratch in my restaurant kitchen. If you buy the same ingredients to make it at home or a laksa ready meal from a supermarket, the government takes nothing. This is the part nobody outside the industry understands.

In France, Spain and Italy, hospitality VAT is 10%. In Ireland it drops from 13.5% to 9% next month. In Germany it is 7%. We pay one of the highest rates in Europe for the privilege of feeding people in a room.

We have been in survival mode since Covid. The pandemic drained our cash reserves and left a bounce-back loan in their place – a debt where a cushion used to be.

There has been no clear run since. Every time trading steadied, something knocked it sideways: the cost-of-living squeeze, roadworks outside the restaurant for a quarter, heatwaves that empty a dining room, tube strikes that empty a high street.

In April 2025 employer national insurance and the minimum wage went up. This April the minimum wage rose again, statutory sick pay became payable from the first day of illness and business rates jumped by more 100%.

I have never begrudged my staff a proper wage, nor complained about paying my taxes. In July 2025 I moved £10,000 of my own savings into the company account to cover a single VAT bill, bridging a shortfall after an extended heatwave cut sales.

But now there are no more funds to plunder. I cannot raise prices any further, because already my customers can’t afford it.

In February 2026 Rachel Reeves’s entrepreneurship adviser Alexandra Depledge said the UK “doesn’t need any more restaurants”. I have thought about this a lot. It treats the places where people meet, mark birthdays, get their first job and learn a trade as an optional extra – as though the country would manage perfectly well without them.

Yet when restaurants close, an entire ecosystem goes with them: suppliers, workers with families, the first rung for young people, once-busy neighbourhoods.

So what could the government have done? Cut hospitality VAT to 10%, in line with our neighbours. It would be a lifeline for thousands of independent operators doing what I did for years – quietly covering the gap between effort and viability out of their own pockets, until they can’t.

If you have ever loved an independent restaurant, cafe or pub and want to help keep the next one open, sign the petition for a 10% VAT rate for hospitality at vatstheproblem.co.uk.

Closing was the only responsible call after an autumn and winter of muted sales.

These months have usually been our strongest – match season at the Emirates stadium – and carried us through the leaner summer, when regulars are away and heatwaves stifle demand. Continuing was impossible without injecting more of my own money.

I am not leaving food. Alongside the restaurant, I have spent the past few years writing and working with food and hospitality businesses on advisory and product development – this continues. For my own sanity, I have no intention of returning to restaurants as an independent operator.

Mandy Yin is the author of Sambal Shiok: The Malaysian Cookbook and Simply Malaysian– mandyyin.com

Photograph by Karen Robinson for The Observer