Keep VAT at 12.5% and Let Hospitality and Tourism Play its Part in Levelling Up, Trade Bodies Tell PM

A powerful coalition of the country’s hospitality and tourism trade and membership bodies has called on the Prime Minister to keep VAT low for businesses in these vital sectors, enabling them to play their part in the Government’s levelling-up and job creation agenda.

Co-ordinated by UKHospitality, the letter argues that keeping VAT at its current rate of 12.5% for these sectors will help to accelerate the UK’s economic recovery from the pandemic, safeguard the future of businesses and millions of jobs and allow firms to invest in their workforce with higher wages and improved training opportunities.

Signatories to the letter include: UKHospitality, Sacha Lorde London First, New West End Company, Night Time Industries Association and the Scottish Tourism Alliance. The full list of signatories is below.

With businesses feeling the impact of a multitude of cost pressures and labour shortages, the letter says that keeping VAT at 12.5% on a permanent basis will help keep prices more affordable for customers and unlock investment in local communities and coastal areas across the UK.

The letter states: “All of us in the hospitality and tourism sectors share that ambition and our businesses are present in all parts of the country, including, crucially, towns around the country that have been left behind, including coastal areas. We will be critical to your levelling-up agenda and we are eager to play our part. To facilitate our role there is one crucial lever that Government can pull – to keep VAT at 12.5%.

“The pressures on business at present are well-documented and are already creating inflationary pressures. Increasing VAT for our sectors back to 20% will push many to breaking point. Retaining it at 12.5% will relieve upwards pressure on prices and will leave people with more money in their pockets, while delivering on our shared goals.”