London Restaurants Expand to Gulf as UK Tax Rate Tops Europe

James Robson, co-owner of the popular St James's Market restaurant Fallow, has signed a deal to open a new branch in the Gulf. The move follows similar expansions by other high-profile London venues, driven by what Robson calls a tax tsunami at home and a stronger work ethic abroad. Fallow serves 1,000 customers daily and has 650,000 Instagram followers, but Robson is now looking to Asia, the United States, and the Gulf as primary growth targets.

The shift to the Middle East is not new. Scott's of Mayfair and the two-Michelin-star Indian restaurant Gymkhana have already opened locations in Dubai. The upmarket Chinese venue Park Chinois and the Borough Market bakery Bread Ahead have also expanded there, while the Mayfair restaurant Isabel's opened in Abu Dhabi. These openings occurred despite the US-Israeli war in Iran earlier this year, which caused bombardment in Dubai and an exodus of expats. Some venues, including Dinner by Heston, remain temporarily closed, and the Michelin guide faced criticism for listing 16 restaurants that are no longer open.

The core of the financial complaint is the value added tax. UK hospitality VAT stands at 20%, which is among the highest in Europe where the average restaurant rate is about 12%. Italy charges 10% on food sold in restaurants. Chefs are urging Chancellor Andy Burnham to lower the rate in next week's budget. Robson argued that the UK has sleepwalked into multiple anti-growth taxations in the last two budgets. He also cited 25% corporation tax and dividend tax rates of 40% or more, asking for VAT to align closer to European levels.

Jason Atherton, a Michelin-starred chef, now spends one-third of his time at his Dubai restaurant. He states that making a profit is easier abroad than in London. Robson said he does not resent paying UK tax and is proud to contribute to the country's deficit. However, he argued that UK growth no longer offers a sensible balance of risk and reward, so he is playing it safe at home and focusing overseas.

Human rights groups are urging caution regarding the expansion. Felix Jakens, director of campaigns for Amnesty International UK, noted that the UAE has a very poor record on workers' rights and protection from labor exploitation. He warned that heavy spending by the UAE on its UK image, particularly through Manchester City, should not distract from how workers are treated. Migrant workers make up the majority of the UAE's population and remain bound by a sponsorship system that ties them to their employers. This system exposes them to abuse and denies them the right to form trade unions.

Jakens said any UK business expanding into the Gulf must carry out proper human rights due diligence. This process should ensure kitchen staff are treated fairly, paid properly, and able to raise concerns without fear of losing their job or visa. Robson is currently in Hong Kong exploring opportunities in East Asia, which he says has a work ethic and taxation system that puts the UK to shame. The next step for these London brands is to secure these overseas locations while navigating the upcoming UK budget.