Expert Insight
NEWS from
There’s no doubt that Chancellor Rishi Sunak did a great deal to help our sector get through the pandemic, but if we were to choose one thing that would give our beleaguered sector the very best chance to stage a full post- Covid recovery, it would be leaving VAT well alone.
Ask most operators what’s at the top of their recovery tools wish list, and I reckon the vast majority – maybe every single one of them – would answer VAT at 12.5%. It really is that significant.
Because raising VAT to its pre-coronavirus level will sound the death knell for many hospitality businesses already facing a bleak looking April, chock full of potentially ruinous financial hurdles, from increased rents and business rates to rising costs and suffocating debts.
Retaining VAT at 12.5% for hospitality and tourism would mean the UK remaining competitive versus its international rivals, while at the same time keeping down costs for consumers.
Indeed, those very consumers are overwhelmingly opposed to a VAT hike in April, according to a survey commissioned by UKHospitality and conducted by YouGov. The representative study of 1,743 consumers
Kate Nicholls UKHospitality Chief Executive
The clock’s ticking, but there’s still time ahead of 1 April for us to exert pressure on the
Government, and urge it to keep VAT at 12.5% for the hospitality sector. It’s a big ask, but it’s a crucial ask, and we must do all we can in the remaining days to see that it doesn’t return to a potentially devastating 20%.
revealed the extent of the cost crunch, with a massive 92% of respondents reporting an increase in their cost of living since before the pandemic, and two thirds saying they are cutting back on eating out as a result.
Launched last year and ramped up as we approach the fateful month, our #VATsEnough campaign, which has widespread backing from hospitality leaders, continues to urge the Government to hold VAT at 12.5%. And while it would still be higher than in many competitor countries – in France and Spain VAT’s 10%, while in Germany and Belgium it’s only 7% and 6% respectively – 12.5% VAT would ensure the UK becomes a more affordable and desirable destination for foreign and domestic tourists.
But before they come, we must protect those thousands of hospitality businesses that are struggling to survive, and at the same time keep their thousands of employees in work.
By the time you read this, April will be just days away, and on 23 March the Chancellor is scheduled to make his Spring Statement, providing an update on the overall health of the economy, and during which we’re likely to find out whether or not our call has been answered.
Which might make you think it’s now too late to steer the Government down the 12.5% route. But it’s not. The hospitality industry has a strong collective voice, and making it heard now – even at this late stage – can make a vital difference.
An 11th-hour flurry of letters, emails and postcards received by local MPs could just tip the balance, as our voice gets heard in Westminster and the nation as a whole; while promoting the campaign in your venue(s) will raise awareness among customers, hopefully resulting in a last-minute surge of support for our efforts.
Make no mistake, this isn’t a narrow, self-serving attempt to save only the hospitality sector, but a genuine push to enable our industry to do what it’s undoubtedly capable of – leading the UK’s post-pandemic economic recovery. After all, prior to Covid, hospitality was the third largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined. And with the right trading environment, it can be that strong once more.
So come on, hospitality; it’s not to late to lend your support. To find out how, please visit:
www.ukhospitality.org. uk/page/vatsenoughcampaign
6
March 2022
www.venue-insight.com
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