Expert Insight
NEWS from
Kate Nicholls UKHospitality Chief Executive
On the first of this month, VAT for hospitality and tourism rose to 12.5% ahead of a scheduled
return to its pre-pandemic level of 20% in April 2022 – just as peak season for some venues begins. Not great timing. Not great full stop. Which is why UKHospitality has launched #VATsEnough, a new campaign that calls on the Chancellor to introduce a permanent lower rate of VAT for the sector.
As part of the campaign, we urge you, your customers and employees to lobby their MPs on the need to lock in the 12.5% VAT rate for local pubs, bars, restaurants, hotels and other sector businesses ahead of the Budget set for 27th October. More details can be found on the #VATsEnough campaign website but essentially this is a multi-channel campaign encouraging everyone who works in, visits and enjoys hospitality and tourism venues to contact their local MP, urging them to back the campaign and support our sector.
There is no doubt that a return to 20% VAT next Spring will have serious consequences: six in 10 sector businesses say it could lead to cutbacks and job losses and it will inevitably lead to price increases that hard pressed consumers facing significant cost of living increases will find hard to swallow. This, in a sector that has already lost around 12,000 businesses, 660,000 jobs and £100bn in lost sales over the previous 18 months.
Keeping VAT at its current rate will enable sector businesses to look forward with positivity; our analysis shows it would enable the creation of 125,000 jobs, boost investment, avoid damaging and inevitable price
increases and accelerate the UK’s post‑pandemic economic recovery.
Not doing so will prove disastrous, as exclusive YouGov polling undertaken as part of the campaign shows. The research revealed that half (49%) of the adult population say they will eat out less frequently if prices are increased in restaurants, pubs and cafés. This will be devastating for businesses already vulnerable and fighting to survive in the face of staff shortages, supply chain issues and punitive business rates.
The research also clearly shows significant public support for a permanently lower rate of VAT for the sector. Over half believe that keeping a reduced rate of VAT would directly
benefit their local high streets and almost two thirds (63%) say it would have a positive impact on hospitality. The vast majority (81%) say hospitality and tourism is important for providing local jobs, while 78% believe the industry is vital to their local communities. Furthermore, over half (55%) remain concerned about the closure of eating and drinking out venues, and 46% are worried that more accommodation venues and attractions will close.
A concerted effort by the industry and the communities they serve could help secure that permanent low rate of VAT rate, so please do get involved and show the Government that #VATsEnough.
6
October 2021
www.venue-insight.com
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