Rishi Sunak has been urged by more than 200 leaders in the hospitality industry to not increase 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.
After the Covid-19 lockdown, the VAT for this sector was reduced by 5% to 5% in summer 2013. This was to help restaurants, bars, and pubs.
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 percent this month, and will return to the 20 percent 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.
The business leaders including the heads of Pizza Express, Caffè Nero and Travelodge argued raising the VAT tax would cause devastation in a letter to the Chancellor
‘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.