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Campaign calls for permanently low VAT rate for hospitality

Trade association UKHospitality has launched a new campaign calling on the chancellor Rishi Sunak to make the 12.5% VAT rate permanent for hospitality and tourism.

#VATsEnough comes in the wake of the VAT rate for hospitality and tourism businesses rising to 12.5%, on 1st October. Under current plans VAT will return to its pre-pandemic level of 20% come April 2022.

UKHospitality, however, wants to see a permanent cut to VAT, claiming it will enable sector businesses to create 125,000 jobs, rebuild their balance sheets, boost investment, avoid damaging price increases and accelerate the UK’s post-pandemic economic recovery.

Kate Nicholls, chief executive of UKHospitality, said: “We’re launching the #VATsEnough campaign because a failure to act risks the future of hotels, cafés, pubs, restaurants and myriad other venues and attractions across the country. Our businesses bring light, life and heart to communities across the country but are battling huge challenges in terms of labour shortages and the food supply chain after 18 months of desperate struggle due to the pandemic.

“By introducing a permanent 12.5% rate of VAT in his autumn Budget, the Chancellor can help us bounce back strongly, keep prices affordable for customers and level up UK jobs. Lower VAT will foster investment in businesses and high streets, accelerating our recovery from the pandemic. Let’s lock in VAT at 12.5% permanently.”

The campaign follows a YouGov poll that shows six in 10 adults (57%) believe that the hospitality sector VAT rate should not return to 20% next year and seven in 10 (70%) think the Government has a responsibility to support the sector’s recovery.

Critically, half (49%) of the adult population say they will eat out less frequently if prices were increased in restaurants, pubs and cafes.

UKHospitality is now urging customers, suppliers, hospitality venues and employees to lobby their MPs, with Kate adding: “We need the whole hospitality sector, its suppliers, employees and customers to come together and demonstrate to Government how critical the lower rate of VAT is for our sector’s recovery.”

More details can be found via the #VATsEnough campaign website

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