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HomeBusiness NewsChancellor must extend VAT cut with rates holiday for hospitality sector

Chancellor must extend VAT cut with rates holiday for hospitality sector

20th Jan 21 1:05 pm

Hospitality industry chiefs have said that the Chancellor Rishi Sunak must extend VAT cut and business rates to “repair businesses.”

The trade group UKHospitality have written to Sunak and have called for the VAT reduction to be extended for the year to help “stimulate economic recovery.”

They also said that the government should enact other business rates holiday for the 2021 and 2022 financial year in order to “protect communities and repair businesses.”

Thus far the hospitality sector have benefited through the VAT reduction on food and soft drinks from 20% to 5%, which ends at the end of March 2021.

Kate Nicholls, chief executive of UKHospitality, said the sector has “lost around 650,000 jobs” amid the pandemic.

Nicholls added, “Thankfully, many more businesses have managed to adapt and are still managing to cling on, keeping jobs safe and giving their staff, customers and communities hope that they will be able to reopen once the vaccine rollout makes it safe to do so.

“A wide-ranging package of financial support will give hospitality businesses the best chance of not just surviving the remainder of the crisis but leading the UK’s economic recovery in the years ahead.

“If we get what we need, hospitality can spearhead the economic recovery of the country, revive high streets and provide employment and investment in every single region.”

The Confederation of British Industry (CBI) have also called on the Chancellor for extensions and are urging the government for further furlough in the March Budget.

Last week, Alison Brittain, chief executive of hotel and pub giant Whitbread said a move to extend the VAT and rates relief would be a “good policy decision for the government, because hospitality does have the opportunity to bounce back and help the economy recover as and when we come out of this pandemic.”

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