Home Business News The crippled hospitality sector calls for a ‘freeze of VAT at 12.5%’ and ‘to reinstate furlough for first quarter of 2022’

The crippled hospitality sector calls for a ‘freeze of VAT at 12.5%’ and ‘to reinstate furlough for first quarter of 2022’

by Mark Fitt Political Journalist
14th Dec 21 12:18 pm

The Night Time Industries Association, the main trade body representing businesses in the UK’s Night Time Economy, has called on the Government to urgently provide businesses with financial support through the coming Omicron wave of the pandemic.

The trade body says that government rhetoric and guidance has left the sector facing ’12 days of Christmas misery’, with the Government allowing businesses to trade but heavily implying that consumers should reduce contacts and socialising in order to combat the next wave of the pandemic.

It means that businesses, most of which still have huge unpaid pandemic debts, are facing reduced revenues and more spiralling costs and the prospect of taking on even more debt if they want to survive.

NTIA members are reporting cancellations and reduced attendance to such a degree that many are once again considering whether they are able to keep trading. Footfall since last Thursday is already down 30% on average and still falling daily, with 50% or greater declines being likely over the coming days as the bulk of cancellations kick in, and knock-on effects are being felt across the supply chain.

The crisis in the supply chain will have significant effects on the wider economy, with staff hours and supplier orders being cut as companies desperately try to stay afloat. Musicians, Technicians and DJs are seeing performances scrapped, contracts terminated, and millions of pounds of fresh food stock is going to waste as reservations are cancelled and customers ‘no show’. Estimates from the NTIA suggest the sector has seen £4 billion in additional economic damage to the sector in the last week alone.

The trade body also warns the Government about pursuing a policy of a ‘pseudo-lockdown’ in response to Omicron – where they will not mandate venue closures, but nevertheless with similar effects businesses’ ability to trade profitably. The trade body therefore argues the Government must provide support commensurate with the signal being sent on reduced socialising.

They are calling for a freeze ofvVAT at 12.5%, rather than go ahead with the planned increase to 20%, with additional sector-specific grants recognising the unique burden hospitality faces and to reinstate Furlough for First Quarter of 2022.

Michael Kill CEO NTIA said, “It is now clear that the Government have left the sector facing 12 days of Christmas misery, with no mandatory restrictions on trade but still a significant drop off – just as the Prime Minister did initially back in March 2020 before he eventually forced a lockdown. Night time businesses are particularly reliant on the festive period to get them through the rest of winter – without this, the result is a threat to the very survival of thousands of businesses and jobs.”

“It is vital that the Government and in particular the Chancellor recognise the impact of the Government’s public health messaging and swiftly implement proportionate financial support to ensure businesses and jobs are protected during this extremely challenging period. The Chancellor may be wary of stumping up the cash but this will be better for the economy in the long run than putting businesses at risk of failing. Night Time Economy businesses are social hubs in the heart of communities across the UK –  you simply cannot “level up” the country if a swathe of them are lost to this pandemic”

“Throughout the pandemic, our members and their staff have done their bit to support the national effort, often at enormous personal and professional cost. But the Government needs to hold up their end of the bargain. It is economically illiterate and morally wrong if they do not.”

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