In a letter to the MPs – all of whom have previously expressed support for the idea of reducing VAT ‒ the Campaign said that the decision to leave the EU could help the cause, “putting money back in consumers’ pockets” and “helping to secure vital jobs”.
The new letter comes soon after the Association of Licensed Multiple Retailers (ALMR) and the British Beer and Pub Association (BBPA) sent briefings to MPs on the same issue.
Both organisations have joined the VAT Campaign to call for a reduction in the level of VAT on food and drink served in pubs and restaurants in the UK.
VAT currently stands at 20 per cent, and, the Campaign claims, has previously been decided by Brussels. The Campaign has regularly suggested that VAT should be set at five per cent.
The VAT Campaign’s lobbyist Chris Guyver said: “The electorate’s decision could ultimately be very beneficial for our campaign to reduce the level of VAT levied on the sector. Our letter stresses that Brexit has huge, potentially positive implications for the pub, restaurant and hospitality industry.
“Consumer confidence is strongly correlated to the extent people go out to eat and for a drink. If expert prediction is correct and the UK falls into recession, then it would be logical for a new Government to mitigate the effects of a downturn in the sector by using its new tax levying freedoms to reduce the fiscal burden on the hospitality sector.”
He added: “VAT is regulated at EU-level. It is compulsory to have a rate of at least 15 per cent and the vast majority of the details of system are governed via Brussels Directives. The UK can now decide whether to keep VAT and, more importantly perhaps whether to change the system.”
A government priority?
ALMR chief executive Kate Nicholls, said: “A new VAT rate specifically for pubs and restaurants can now be designed in a manner that minimises the initial cost to Treasury while maximising the benefit for pubs and restaurants, putting money back in consumers’ pockets and helping to secure vital jobs and creating many more.”
“The obvious solution would be for the Government to reduce the VAT applying to the sector, bringing tax rates levied on hospitality more into line with other sectors of the economy.”
BBPA chief executive, Brigid Simmonds, added: “It is unfair that if you buy a meal in a supermarket you pay no VAT, but in the pub you do. Even a drop in the VAT rate, to 15 per cent for eating out, would lead to an additional 78,000 jobs. I hope the government makes this a priority.”