Government urged to keep VAT at 12.5%

UKHospitality is urging the government to keep VAT at its current rate of 12.5% for hospitality and tourism businesses. Its #VATsEnough campaign is calling for the tax to remain at its current low permanently, instead of being increased back to 20% on 1st April.

The industry body argues that just as businesses in the sector are getting back on their feet, the planned rise risks knocking them down and out for good. It says that a failure to act could risk the future of cafés, restaurants, pubs and hotels across the country.

Kate Nicholls, chief executive of UKHospitality, told us: “Huge challenges remain for our sector, which is low on cash reserves, deep in debt and under immense pressure. Costs are rising across the board, and will continue upwards with the increase in employment costs and this spring’s business rates hike. This is all before we even mention the biggest threat to a proper recovery for contract catering businesses: the proposed return in April to 20% VAT for hospitality and tourism.

“UKHospitality is ramping-up its #VATsEnough campaign, urging the government to maintain VAT for the sector at 12.5%, and not raise it to 20% ahead of Easter, just as many businesses enter their peak spring and summer trading periods. By keeping VAT at 12.5%, the government will be helping us keep costs down and not pass on huge price rises to consumers, thus helping us remain competitive versus our international market rivals.”

To get involved or for more info, go to www.ukhospitality.org.uk/page/vatsenough

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