London dining giants bet on Dubai as UK tax rates climb

James Robson, co-owner of the London restaurant Fallow, has signed a deal to open a branch in the Gulf. The move joins a growing list of high-profile UK dining brands expanding into the Middle East.

Fallow, located in St James's Market, serves 1,000 people daily. It gained international recognition through social media, amassing 650,000 Instagram followers, and for dishes such as a whole cod's head served in a spicy butter sauce.

Robson is not alone in this shift. Scott's of Mayfair has opened a location in Dubai. The two Michelin-starred Indian restaurant Gymkhana and the upscale Chinese venue Park Chinois have also expanded to the city. The Borough Market bakery Bread Ahead has followed, while the Mayfair restaurant Isabel's opened in Abu Dhabi.

The expansion continues despite regional conflict. The US-Israeli war in Iran earlier this year left Dubai facing bombardment and caused an exodus of expatriates. Dinner by Heston has remained temporarily closed since the war's fallout. The Michelin guide faced criticism this month for listing 16 closed restaurants, a result of inspections conducted before the conflict began.

Robson, speaking from Hong Kong where he is exploring Asian opportunities, identified East Asia, the United States, and the Gulf as primary growth targets. He stated that while America champions business, the Gulf actively encourages and assists companies. He noted that East Asia maintains a work ethic and taxation system that puts the UK to shame.

Hospitality VAT is a central driver for the move. The UK rate stands at 20%, among the highest in Europe, where the average for restaurants is approximately 12%. Italy charges 10% on food sold in restaurants. Robson described the UK as having "sleepwalked into multiple anti-growth taxations" in the last two budgets. He expects further changes next week and points to 25% corporation tax and dividend tax rates of 40% or more.

Chefs are urging Chancellor Andy Burnham to reduce the VAT rate in next week's budget. Jason Atherton, a Michelin-starred chef who now spends a third of his time at his Dubai restaurant, says it is easier to make a profit abroad than in London. Robson said he does not resent paying UK tax but argued that the current growth environment no longer offers a sensible balance of risk and reward.

Human rights campaigners urge caution on the expansion. Felix Jakens, director of campaigns at Amnesty International UK, said the UAE has a very poor record on workers' rights and protection from labor exploitation. He noted that the country's heavy spending on its UK image, particularly through Manchester City, should not distract from how workers are treated.

Jakens said migrant workers, who make up the majority of the UAE's population, 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. He stated that any UK business expanding into the Gulf must carry out proper human rights due diligence to ensure kitchen staff are treated fairly, paid properly, and able to raise concerns without fear of losing their job or visa.