Reduce the VAT on Hospitality businesses to 10%

Reduce the VAT on Hospitality to 10% from the current rate of 20% to allow Hospitality to survive the storm - or risk losing a large proportion of the industry to it.

The current tax system is disproportional and should be changed alongside changes in tax on supermarkets and online sales.

As an industry we face unprecedented hurdles.

- Wages have increased 20% - Food prices have risen by 8.5% - Utilities have doubled - Rates are soon to rise - We have higher debts payments coming out of the pandemic

This presents a perfect storm of costs that just can't be absorbed. We must reduce VAT to 10% to help us weather this unprecedented storm.

This rate should be extended to

• Hot Food • Soft Drinks • Hot Drinks • Events & Door Tickets • Accommodation • Attractions

VAT is the UK's third largest tax forecast to raise £161 billion in 2023/24, helping to fund key spending priorities such as important public services, including the NHS, education, and defence. The previous VAT relief for tourism and hospitality cost over £8 billion and introducing a 10 per cent rate would come at a significant further cost.

It was appropriate that as COVID-19 restrictions were lifted and demand for goods and services in these sectors increased, the temporary tax reliefs were first reduced and then removed in order to rebuild and strengthen the public finances.

However, the Government recognises the impact of COVID-19 on the tourism industry, which is why the Government published the Tourism Recovery Plan to help the sector return to pre-pandemic activity levels as quickly as possible. Since the start of the pandemic, over £35 billion has been provided to the tourism, leisure and hospitality sectors in the form of grants, loans and tax breaks.

The Government also understands businesses are struggling with the cost-of-living crisis. At Autumn Statement 2022, the Government announced a package of support worth £13.6 billion for businesses over the next five years. Together with the revaluation, this package ensures bills will more accurately reflect current market values whilst protecting businesses from large bill increases. Businesses in the retail, hospitality and leisure sectors, including pubs, will receive a tax cut worth over £2 billion in 2023-24. Eligible properties will receive 75 per cent off their business rates bill, up to a cap of £110,000 per business. The Government has also committed to freezing the multiplier for a further year, which is a tax cut worth £9.3 billion to businesses over the next 5 years, and means all bills are 6 per cent lower, before any reliefs or supplements are applied, than without the freeze.