Packed dining rooms are hiding a crisis in hospitality, a Chester restaurateur has warned as he backs a national campaign to cut VAT to 10%.

Death By Tacos is one of a number of Chester eateries raising awareness of 'VATsTheProblem', a nationwide petition urging the government to reduce VAT for the hospitality sector. Aiming for one million signatures, it argues that a VAT reduction would help support the high street and safeguard local jobs.

Leading the campaign is chef and publican Tom Kerridge, who is calling for hospitality VAT to be cut to 10% to ease pressure on businesses and bring rates closer to those seen across Europe.

Among the Chester businesses backing the campaign is Death By Tacos, a dive bar and taqueria on Watergate Street. Despite attracting queues and a social media following of more than 30,000, owner James Smith said rising costs were putting severe pressure on the sector.

He pointed to wider struggles among well-known operators, arguing that even established names were finding profitability increasingly difficult.

"If people at the top of the tree, the people who are the best at it, can't make it work, I don't know how anyone in the middle is supposed to make it," he told Nub News.

According to James, margins have become so compressed that the traditional benchmark of a 10% profit margin is now increasingly rare across the industry, with many businesses operating on far slimmer returns once staffing, rent, energy and ingredient costs were accounted for.

He cited recent pressures on the sector, including the scaling back of restaurateur Gary Usher's portfolio, as well as the closure of Northgate Street restaurant Covino, which shut in May after almost a decade in the city - describing it as a benchmark for Chester's food scene.

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"Covino was perfect in my eyes - it was something to look up to," he said. "The places that you would be striving to emulate, even those aren't working."

He said the closure reflected wider pressures facing independent operators, with some now approaching lease break clauses and questioning whether they could continue trading.

"If you go past a restaurant on a Saturday night and it's not full, that business is struggling. If you see a business is full, it doesn't even necessarily mean that they're doing well.

"There's a lot of people behind the scenes just thinking I hope it gets better because I'm not going to survive another year."

The business owner argued that many customers underestimate how little restaurants retain after paying staff, rent, rates and suppliers.

"The margins are super tight in hospitality now," he said. "They're high revenue, so you turn over a lot of money, but it means you pay a lot of tax.

"But by the time you've paid for staff and overheads, raw ingredients - which you can't claim back - you're really not making that much money. Most people will be making less than one percent."

Referring to the campaign, he emphasised the importance of focusing on VAT because it was one of the most direct levers the government could use to ease pressure on the sector.

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"VAT is one thing that hits hospitality harder, because the gap is improved by claiming back on the costs," he said. "The price of electric, for example, is a very complex issue. These are really political specific issues that can't be fixed overnight.

"But the government does have the ability to change VAT tomorrow if they wanted to, and that would solve a lot of issues."

Denying the notion of hospitality businesses wanting "handouts", he linked the sector's decline to rising youth unemployment, noting that restaurants, pubs and cafés have traditionally provided many people's first experience of work.

Reducing VAT to 10%, he argued, would help businesses weather rising costs while protecting jobs that might otherwise disappear.

"I think the government seems to think that if it's a business and it's not working, then maybe it doesn't deserve to work," he said. "But it creates other problems, with youth unemployment being so high."

Looking ahead, he warned that Chester's hospitality scene could look very different within five years if current pressures continue. Many independent operators were already struggling, he said, and further closures could leave larger chains as the dominant presence on high streets.

"If they don't do anything and leave it as it is, a lot of your favourite places will close," he said. "A lot of unique, independent places will close and you'll just end up with chains everywhere."

Despite the challenges, James remains committed to the industry, having spent years building a business and community within Chester's restaurant scene.

"I love hospitality. I wouldn't know how to do anything else now," he said.