Parliamentary inquiry recommends VAT remains at 12.5%
The report cited UKHospitality data revealing that the lower rate would bring benefits including jobs, international competitiveness and social wellbeing
An inquiry by a group of MPs has recommended that VAT for the hospitality and tourism sectors stays at 12.5% beyond March.
The All Party Parliamentary Group (APPG) for Hospitality and Tourism, concluded that VAT should not return to 20% this April, citing UKHospitality data revealing that the lower rate would bring benefits including jobs, international competitiveness and social wellbeing.
Writing in the Inquiry into the Retention of the 12.5% Rate of VAT report, Kate Nicholls, chief executive of UKHospitality, which provides secretariat services to the hospitality and tourism APPG, said: “The hospitality and tourism industry has been the hardest hit by the COVID-19 pandemic. However, with the right support, it can play a crucial role in the country’s economic recovery and help rebuild people’s wellbeing after they have had to live under social restrictions for the past two years.
“Hospitality and tourism is a major economic sector, because its businesses are community hubs that bring everyone together, across the entire nation. This will remain true as we learn to live with Covid.
She added: “However, for businesses to provide the best possible service, they need to return to financial strength. We welcome this report from the APPG on Hospitality and Tourism, which highlights the importance of keeping VAT at 12.5% to achieve this.”
Simon Jupp MP (East Devon), chair of the hospitality and tourism APPG, said in the report: “Having sought views across the industry, it’s clear that keeping the reduced rate of VAT will help the hospitality and tourism industry get back on its feet after an exceptionally difficult two years. It’s really important to support the industry to help showcase the best of the UK.”
In its conclusion, the inquiry report stated: “The evidence submitted to the APPG…strongly supports the case for retaining the current 12.5% rate of VAT to support the industry in playing a key role in the UK’s economic recovery and the Government’s wider agenda, such as Net-Zero and levelling-up.”
