Scottish Licensed Trade Calls for VAT Cut to Support Hospitality Businesses as Inflation Soars

As prices continue to rise at their fastest rate for more than 40 years and UK inflation soaring to 9.4% in the 12 months to June from 9.1% in May, according to the Office for National Statistics (ONS), the SLTA (Scottish Licensed Trade Association) is renewing its call for a reduction in the rate of VAT.

The trade association has previously urged the UK Government to reduce VAT to help struggling hospitality businesses recovering from the pandemic. “The temporary reduction of VAT from 20% to 5% from July 2020 to support businesses during the pandemic was hugely appreciated by the hospitality industry but its return to the standard rate from April 1 has coincided with an unprecedented rise in inflation and also food and energy costs,” said Mr Wilkinson.

“Businesses are struggling so it goes without saying that their customers are struggling too. After enforced closures and restrictions during the pandemic, the spiralling cost-of-living crisis and ongoing staffing issues now having an impact on licensed hospitality and many other sectors, it is crucial that both the UK and Scottish governments listen to our concerns.

“Many businesses no longer open seven days or they open later in the day because of rising energy costs and lack of staff so a cut in VAT would go a long way to helping them on the road to recovery and provide much-needed support over what will be a very difficult few months.

“It really is no exaggeration to say that the hospitality industry is still very much in recovery mode although we accept that there are some examples of businesses that are performing well due to their location and business model.

“However, the majority are simply not in a position to cope with these soaring utility bills, fuel increases and the sharp rise in the cost of food and drink – they need help and they need it now.”