Jessie Norman, MP for Hereford and South Herefordshire and financial secretary for the treasury, has revealed there are “no current plans” to extend the VAT cut for the hospitality and tourism sectors.
Following a question on the matter from Scott Benton, MP for Blackpool, Norman said: “The temporary reduced rate of VAT was introduced to support the cash flow and the viability of over 150,000 businesses and to protect 2.4 million jobs in the hospitality and tourism sector.
“It was extended in September and extended again and will now run until 31 March of this year. But the relief comes at as significant cost, and while the government keeps taxes under review, it has no current plans to extend it further.”
Hospitality trade organisations, such as UKHospitality (UKH) and the Tourism Alliance, have called on a reduction in VAT to be a part of a support package for the industry during the country’s third national lockdown.
The Cut Tourism VAT Campaign, in association with UKH and the Tourism Alliance, published a survey which revealed that the VAT rate reverts back to 20% in April 2021, there will be further cut-backs and job losses of around 310,000 jobs in the hospitality sector.