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Campaign launched to peg VAT at 12.5 per cent for hospitality and tourism

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Campaign launched to peg VAT at 12.5 per cent for hospitality and tourism

Setting the VAT rate permanently at 12.5 per cent will create more than 100,000 jobs and boost investment in the UK, according to a new campaign.

In addition, polling from YouGov on behalf of trade body UKHospitality, shows that more than half of adults believe the rate should not return to the 20 per cent next April.

The new campaign, #VATsEnough, has been launched by UKHospitality and calls for the Chancellor to ‘lock in’ low VAT permanently to boost hospitality and tourism sectors.

Across the course of the pandemic, hospitality and tourism were the hardest hit sectors, with 660,000 jobs lost, spending down £100bn and 12,000 licensed venues permanently closed.

With the Budget looming at the end of the month the campaign seeks to persuade the Chancellor Rishi Sunak to permanently set the VAT rate at 12.5 per cent for those sectors.

That rate has just moved up from the temporary five per cent rate, which was in place until the end of September.

The campaign believes making the bold move would boost investment and create 125,000 jobs within the hospitality sector.

They say it would avoid inflation-busting price rises and assist the UK’s post-pandemic economic recovery.

The association is now urging customers, suppliers, hospitality venues and employees to lobby their MPs on the need to lock in the 12.5 per cent rate for local pubs, bars, restaurants, hotels and other sector businesses.

The YouGov polling also found that venues could be badly hit with nearly half of those questioned in the survey, 49 per cent, saying they would not be eating out so regularly if prices were increased as a result of the VAT rise

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.

“By introducing a permanent 12.5 per cent 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 per cent permanently.

“We need the whole hospitality sector, its suppliers, employees and customers to come together and demonstrate to the Government how critical the lower rate of VAT is for our sector’s recovery.”

Other key findings from the survey show that more than 80 per cent of respondents say hospitality and tourism is important for providing local jobs, while 78 per cent believe the sectors are vital to their local communities, many are worried that more accommodation venues and attractions will close.

Nick Mackenzie, CEO of pub company Greene King, added: “The VAT reduction has helped the hospitality sector stay afloat during the last 18 months, but we are facing continued long-term challenges. At Greene King, we have around 2,800 pubs in communities of all sizes and types, and making 12.5 per cent VAT permanent will allow us to plan, invest, as well as create jobs across the country and support the Government’s levelling up agenda.”

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