Fallow CEO Cites 'Tax Tsunami' as London Dining Giants Target Gulf Expansion

One thousand diners pass through Fallow every single day. That volume is the metric James Robson uses to justify the restaurant’s aggressive push into the Gulf, where he has just signed a deal for a new outpost. The St James’s Market venue, which gained fame through a 650,000-follower Instagram account and dishes like a whole cod’s head in spicy butter, is the latest in a line of London’s top names moving abroad.

Robson describes the domestic tax environment as a "tax tsunami" that is driving capital overseas. He is not acting alone. Scott’s of Mayfair, the celebrity hotspot, has already opened in Dubai. So have Gymkhana, an Indian restaurant with two Michelin stars, and Park Chinois, an upmarket Chinese venue. Bread Ahead, a bakery from Borough Market, has also expanded to Dubai, while Isabel’s, a Mayfair institution popular with politicians, has opened in Abu Dhabi.

These openings proceed despite recent conflict in the region. The US-Israeli war in Iran earlier this year led to bombardment of Dubai and a temporary exodus of expatriates. The Michelin guide faced criticism earlier this month for listing 16 restaurants that were permanently or temporarily closed. Inspectors apparently visited some of these venues at the start of the year, before the war began. Dinner by Heston remains temporarily closed due to the fallout.

Robson, who was speaking from Hong Kong while exploring Asian opportunities, identified East Asia, the United States, and the Gulf as key growth targets. He argued that America champions business, the Gulf actively assists investors, and East Asia possesses a work ethic and tax system that puts the UK to shame.

The central grievance is the 20% value added tax on hospitality. This rate is among the highest in Europe, where the average for restaurants is approximately 12%. Italy charges 10% on food sold in dining establishments. Chefs are urging Andy Burnham to cut the rate in next week’s budget. Robson stated the country has "sleepwalked into multiple anti-growth taxations" in the last two budgets and expects further hikes. He also pointed to 25% corporation tax and dividend tax rates of 40% or more.

Michelin-starred chef Jason Atherton now spends a third of his time at his Dubai restaurant. He says it is easier to make a profit abroad than in London. Robson 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 playing it safe at home and focusing his expansion efforts overseas.

Human rights campaigners urge caution on this strategy. Felix Jakens, Amnesty International UK’s director of campaigns, noted the UAE has a poor record on workers' rights and protection from labor exploitation. He warned that heavy spending by the state 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 employers. They are denied the right to form trade unions and are exposed to abuse.

Jakens stated that 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.