The cut in VAT from the standard rate of 20% to 5% for hospitality took effect on 15 July 2 this year and is due to run until the end of March 2021. However, trade group UKHospitality is asking for an extension to the cut to run throughout next year.
UKHospitality is also asking the Government to commit to a business rates holiday to cover the period of 2021 to 2022.
Responding to yesterday’s announcement (17 December) from Chancellor Rishi Sunak on a month-long extension to furlough, UKHospitality said they were “very welcome” but that more still needed to be done to protect businesses from closing.
“With yet more of the country having been served notice of moving into tighter restrictions and 72,500 of Britain’s 110,00 licensed premises unable to open and a further 12,500 wet led venues with little chance of reopening, more will be needed to safeguard jobs and businesses in a sector being seemingly singled out to bear the brunt of Covid measures,” says UKHospitality Chief Executive Kate Nicholls.
“Without additional business support to accompany this extension, there will inevitably be more widespread business failures and job losses.
“Too many hospitality businesses will still be fighting for survival. To instil the business confidence necessary to plan for survival, we urge the Government to commit to a business rates holiday to cover the period of 2021/22 and a VAT cut extension through to end of 2021.
“Such measures will give a vital lifeline to many businesses and enable them to play their role in the economy’s recovery later in 2021.”