Hospitality leaders urge Rishi Sunak not to hike VAT rate

Hospitality leaders urge Rishi Sunak not to hike VAT rate in his autumn budget as the sector recovers from Covid lockdowns

  • More than 200 hospitality leaders asked the Chancellor not to up their VAT rate 
  • They warned Rishi Sunak that keeping the tax at 12.5 per cent was ‘vital’ for recovery
  • Business leaders including the heads of Pizza Express and Caffè Nero signed the letter

More than 200 hospitality industry leaders have written to Rishi Sunak urging him not to up their VAT rate.

Ahead of Wednesday’s Budget, they have warned the Chancellor they face devastation if the tax is returned to its pre-pandemic level of 20 per cent.

VAT for the sector was reduced to 5 per cent in summer last year to help pubs, bars and restaurants after the first Covid-19 lockdown.

The letter ahead of the budget on Wednesday urged: ‘A reduced rate of VAT empowers us to help deliver your ambitions to “level up” our high streets and communities’

It rose to 12.5 per cent this month and is due to return to the 20 per cent rate in April.

The business leaders – including the heads of Pizza Express, Caffè Nero and Travelodge – argued in a joint letter it was ‘vital’ to the industry’s recovery to keep the tax at 12.5 per cent permanently.

Any rise would lead to increased prices for families and destroy the sector’s ability to create jobs and boost the recovery, they said.

‘A reduced rate of VAT empowers us to help deliver your ambitions to “level up” our high streets and communities,’ they added.

Trade body UKHospitality and the business chiefs also urged Mr Sunak to ‘fundamentally reform’ business rates.

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