London chefs open Gulf branches to escape UK tax hike

London chefs are moving capital to the Gulf as UK tax rates squeeze profit margins. James Robson, co-owner of the St James's Market restaurant Fallow, recently signed a deal to open a branch in the region. Fallow serves 1,000 customers daily and holds 650,000 Instagram followers. The restaurant is known for dishes such as a whole cod's head served with spicy butter sauce.

Robson is not the only operator making the move. Scott's of Mayfair has opened a location in Dubai. The two Michelin-starred Indian restaurant Gymkhana and the Chinese venue Park Chinois have also opened there. The Borough Market bakery Bread Ahead has expanded into the city. The Mayfair restaurant Isabel's, which is popular with politicians, has opened in Abu Dhabi.

These openings continue despite recent conflict in the Middle East. The US-Israeli war in Iran earlier this year caused bombardment in Dubai and led to an exodus of expatriates. Some restaurants remain affected by the conflict. Dinner by Heston has been temporarily closed since the war began. The Michelin guide faced criticism in October for listing 16 restaurants that are closed. Inspectors apparently visited some venues in early 2026 before the war started.

Robson is currently in Hong Kong exploring opportunities in Asia. He identified East Asia, the United States, and the Gulf as primary growth targets. He stated that America supports business and the Gulf actively assists operators. He added that East Asia has a work ethic and taxation system that puts the UK to shame.

Hospitality VAT is a central complaint for these operators. The UK rate is 20%, which is among the highest in Europe. The average restaurant VAT rate in Europe is about 12%. Italy charges 10% on food sold in restaurants. Chefs are urging Chancellor Andy Burnham to cut the rate in next week's budget. Robson said the country has sleepwalked into multiple anti-growth taxations in the last two budgets. He expects more tax changes next week.

Robson also pointed to a 25% corporation tax rate and a dividend tax of 40% or more. He asked for VAT to be brought closer to European levels. He 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. He is now playing it safe at home and focusing overseas.

Michelin-starred chef Jason Atherton now spends a third of his time at his Dubai restaurant. He said it is easier to make a profit abroad than in London. Atherton's move reflects the broader trend of capital shifting to jurisdictions with lower tax burdens and different labor dynamics.

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 UAE spends heavily on its UK image, not least through Manchester City. He said this spending should not distract from how workers are treated.

Jakens said migrant workers make up the majority of the UAE's population. They remain bound by a sponsorship system that ties them to their employers and exposes them to abuse. They are denied the right to form trade unions. He said any UK business expanding into the Gulf must carry out proper human rights due diligence. This ensures kitchen staff are treated fairly, paid properly, and able to raise concerns without fear of losing their job or visa.