Hospitality and tourism sector bodies unite to call for a permanent lower rate of VAT to help boost recovery
Trade bodies call on Chancellor to keep VAT at 12.5% to help businesses rebuild post-pandemic
Leading trade associations representing the UK’s hospitality and tourism sectors have joined forces to call on the Chancellor Rishi Sunak to introduce a permanent lower rate of VAT for these fragile sectors, helping to safeguard their future, protect jobs and to accelerate the UK’s economic recovery.
Under Treasury plans, hospitality and tourism VAT rises to 12.5% from today (1st October) and will return to its pre-pandemic level of 20% come April 2022, just as next year’s peak season begins for much of the sector. Now the trade bodies - UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping, Tourism Alliance and the Association of Leading Visitor Attractions - are warning that unless VAT remains permanently low at 12.5%, the Government risks derailing the recovery at a time when businesses are still in survival mode.
Across the course of the pandemic, hospitality and tourism were the hardest hit sectors, with spend down £100bn, 12,000 businesses permanently closed and 660,000 jobs lost. However, the reduction in VAT helped protect hundreds of thousands of jobs and allowed many businesses to stay open and serving customers when permitted to trade. A survey of the trade associations’ members covering 815 businesses operating tens of thousands of venues found that:
“We’re now calling on the Chancellor to commit to introducing a permanent 12.5% rate of VAT in his upcoming Budget, later this month. This will help protect jobs and continue the support for our hospitality and tourism businesses which contribute hugely to the nation’s economic and social wellbeing.”