James Robson Expands Fallow to Gulf Amid UK Tax Complaints

James Robson, co-owner of the London restaurant Fallow, has signed a deal to open a new branch in the Gulf region. Robson identified a combination of domestic tax pressures and a more favorable business environment abroad as the primary reasons for the expansion. Fallow, located in St James's Market, serves approximately 1,000 diners daily and has gained a following of 650,000 on Instagram through its distinctive dishes, including a whole cod's head in spicy butter sauce.

Robson is part of a growing group of London-based hospitality operators moving into the Middle East. Scott's of Mayfair has opened in Dubai, as have Gymkhana, a two-Michelin-star Indian restaurant, and Park Chinois, an upscale Chinese venue. The Borough Market bakery Bread Ahead has also expanded to Dubai, while Isabel's, a Mayfair restaurant popular with politicians, opened a location in Abu Dhabi.

These openings are proceeding despite recent geopolitical instability. Earlier this year, the US-Israeli war in Iran resulted in bombardment near Dubai and caused many expatriates to leave the area. The disruption has affected the hospitality sector; Dinner by Heston has remained temporarily closed since the conflict. The Michelin guide faced criticism this month for listing 16 restaurants that were permanently or temporarily closed, a decision attributed to inspections conducted before the war began.

From Hong Kong, where Robson is assessing opportunities in Asia, he listed East Asia, the United States, and the Gulf as key targets for growth. He stated that America supports business, the Gulf actively assists it, and East Asia possesses a work ethic and tax system that he believes outperforms the UK. Robson specifically noted that the UK has entered multiple anti-growth taxations over the last two budgets and expects further measures in next week's budget.

Hospitality VAT is a central issue for these operators. The UK rate 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. Robson and other chefs are urging Chancellor Andy Burnham to reduce the rate in the upcoming budget. Robson also pointed to a 25% corporation tax rate and dividend taxes of 40% or more as factors that make UK growth less attractive.

Michelin-starred chef Jason Atherton, who now spends one-third of his time at his Dubai restaurant, said it is easier to generate profit abroad than in London. Robson stated that he does not resent paying UK taxes and is proud to contribute to the national deficit. However, he argued that the current UK environment no longer offers a sensible balance of risk and reward, prompting him to play it safe domestically while focusing on overseas opportunities.

Human rights groups have urged caution regarding the Gulf expansion. Felix Jakens, director of campaigns at Amnesty International UK, said the UAE has a poor record on workers' rights and protection from labor exploitation. He noted that the UAE's heavy spending on its UK image, including through Manchester City, should not obscure how workers are treated.

Jakens explained that migrant workers, who make up the majority of the UAE's population, are bound by a sponsorship system that ties them to their employers. This system exposes them to potential abuse and denies them the right to form trade unions. He advised that UK businesses expanding into the region must conduct proper human rights due diligence to ensure kitchen staff are treated fairly, paid properly, and can raise concerns without fear of losing their job or visa.