On Monday, 22nd June I moved a Presentation Bill in the House of Commons on cutting VAT on hospitality. The Bill calls for the UK Government to ‘reduce the rate of value added tax for certain supplies relating to hospitality; and for connected purposes’.
With this Bill, I am urging the UK Government to introduce an immediate and lasting reduction in VAT for hospitality businesses that are struggling with a series of challenges caused by the cost of living and energy crises and the negative effect of changes to businesses policies at Westminster.
I’ve previously highlighted in Parliament the damage being done to local hospitality businesses in my constituency due to high rates of VAT as well as hikes to National Insurance and a lack of government support. Now this Bill is is an opportunity to focus on the unfairness in the UK’s VAT regime with the heaviest VAT obligations in Europe.
In May, the UK Government introduced the Great British Summer Savings Scheme, with targeted and temporary reductions on VAT on the costs of children’s meals in restaurants, children’s tickets for theatres and cinemas and attractions such as theme parks over the summer holidays. This scheme has been heavily criticised by the hospitality industry as being ‘laughable’, with the sector calling for a more effective and comprehensive cut in VAT from 20% to 10%.
I am also a signatory to Early Day Motion 196 which focuses on the damage done to UK Hospitality as a whole by the UK Government’s decision making on this issue. The UK is an outlier among European countries with a full VAT rate of 20% as compared to the European average of 12.8%, and significantly higher than the 10% rate applied in France, Spain and Italy.
Something must be done at haste to relieve this pressure before more hospitality businesses go under due to a highly uncompetitive system that penalises profitability, ambition, and job prospects.
