London restaurant owners sign Gulf deals as UK tax rates climb

James Robson, co-owner of the St James's Market restaurant Fallow, signed a deal to open a branch in the Gulf this month. The move places the St James's venue, which serves 1,000 people daily, in a growing group of London dining brands expanding into the Middle East. Robson identified high domestic tax rates as the primary motivator for the expansion.

The UK imposes a 20% value added tax on hospitality services. This rate exceeds the European average for restaurants, which sits at approximately 12%. Italy charges a lower rate of 10% on food sold in dining establishments. Robson stated that the country has "sleepwalked into multiple anti-growth taxations" in recent budgets. He expects further tax increases in the upcoming budget.

Robson compared the business environments across three regions during a call from Hong Kong. He noted that the Gulf actively encourages and assists businesses. He contrasted this with East Asia, which he said possesses a work ethic and taxation system that places the UK in a difficult position. He also mentioned that the United States champions business, making it a key growth target alongside the Gulf and East Asia.

Fallow joins several other London brands that have already established a presence in the region. Scott's of Mayfair opened in Dubai, as did the two Michelin-starred Indian restaurant Gymkhana and the Chinese venue Park Chinois. The Borough Market bakery Bread Ahead has also expanded there. Isabel's, a Mayfair establishment popular with politicians, opened a location in Abu Dhabi.

Jason Atherton, a Michelin-starred chef, now spends one-third of his time at his Dubai restaurant. He stated that it is easier to make a profit abroad than in London. Robson said he does not resent paying UK tax but argued that domestic growth no longer offers a sensible balance of risk and reward. Consequently, he is maintaining operations at home while focusing expansion efforts overseas.

The expansion continues despite regional conflict. The US-Israeli war in Iran earlier this year left Dubai facing bombardment and caused an exodus of expats. Dinner by Heston has remained temporarily closed since the war began. The Michelin guide faced criticism in October for listing 16 restaurants that were permanently or temporarily closed. Inspectors apparently visited some venues in early 2026, before the conflict started.

Human rights groups have urged caution regarding the expansion. Felix Jakens, Amnesty International UK's director of campaigns, said the UAE has a poor record on workers' rights. He noted that migrant workers make up the majority of the UAE's population. These workers remain bound by a sponsorship system that ties them to their employers and prevents them from forming trade unions.

Jakens advised that UK businesses expanding into the Gulf must carry out proper human rights due diligence. He stated that kitchen staff must be treated fairly, paid properly, and able to raise concerns without fear of losing their job or visa. He added that the UAE's heavy spending on its UK image should not distract from how workers are treated.