West Midlands hospitality business leaders urge Chancellor to hold VAT at 12.5pc
Pub and restaurants group Marston's is among hospitality and leisure business signatories to a letter urging a rethink on a rise in VAT.
FTSE100 companies, including the Wolverhampton-based business, have joined small and medium-sized companies and individual businesses in urging Chancellor Rishi Sunak to drop the planned April rise to 20 per cent.
More than 250 business leaders from hospitality and leisure have written to him asking the Government to keep VAT at 12.5 per cent beyond March.
They call on the Treasury to maintain the current level to enable many fragile businesses to continue their recovery, to protect jobs, and to help stave off higher inflation in the economy.
The letter campaign has been led by UKHospitality.
Kate Nicholls, chief executive of UKHospitality, said: “There are many compelling reasons why VAT should be held at the current rate given the current circumstances. However, this is about so much more than an extension to temporary measures in the face of the challenges brought by Covid; it’s about working to establish the right tax level for our world-class hospitality and tourism industries. It is vital, in the interests of competitiveness, job creation, growth and ensuring hospitality and tourism play their full part in driving the economic recovery.”
Among the signatories are leaders from Birmingham-based Mitchells & Butlers, Caffe Nero, Center Parcs, JD Wetherspoon, Pizza Express, Pizza Hut and Punch Pubs.
The letter highlights the success of the lower rate of VAT applied for tourism and hospitality (on food, accommodation and non-alcohol drinks) in enabling businesses to survive, protect jobs and to continue their recovery, despite “the ravages of the pandemic”. It also says the policy has been paramount in helping businesses to keep as low as possible their prices to customers, in the face of significant cost pressure in the sector, including the cost of energy, transportation, wages and food and drink.
A major concern of the impact of the VAT rise is that businesses will have no choice but to significantly raise their prices, putting pressure on the cost of hospitality experiences and also further fuelling inflation across the economy.
