RACHEL Reeves is under pressure to permanently cut VAT for hospitality firms to TEN per cent to boost the sector.
The Chancellor facing calls to help pubs, restaurants and hotels to cut the levy to drive demand and help consumers.
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Hospitality chiefs are calling for a permanent 10 per cent VAT rate Credit: Getty
Chancellor Rachel Reeves faces calls to reduce the VAT rate for hospitality firms Credit: Getty
The demand comes after the Treasury has cut VAT to 5 per cent over the summer months for theme park entry, kids’ meals and indoor play.
UK Hospitality chair Kate Nicholls is demanding the change following the campaign from telly chef Tom Kerridge’s to make the cut to 10 per cent.
The sector has been badly affected by the rise in national insurance contributions and the hike to the national minimum wage – with a major knock-on impact on young workers.
Nicholls said: “Rising business costs are having such a devastating impact on job opportunities, in hospitality and across the economy.
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“We warned after the October 2024 Budget that job losses were the inevitable consequence of hiking employment taxes, and we’ve seen more than 100,000 jobs lost in the sector since.
“Hospitality was the canary in the coal mine then, but it remains the sector that can solve the youth unemployment crisis the Government faces.”
She will make the pitch for the permanent cut to VAT at UK Hospitality’s annual conference in central London today.
She said: “We are the growth engine and mass employer of young people at the Government’s disposal.
“It needs us to deliver on our potential. We can grow once again if we’re properly supported and our cost burden reduced.
“The Treasury’s summer savings package to temporarily reduce VAT to 5% for family tickets, children’s meals and indoor play will be a big help for businesses that stand to benefit this summer, but it’s clearly not a solution that helps the entire sector.
“What it did demonstrate, for the first time in many years, is that the Government has once again recognised that VAT is the lever to pull if it wants to support consumers, drive demand, create jobs and back consumers.
“We have always made incredibly clear to government that VAT is the fiscal measure to use to fully unlock hospitality’s potential.
“This recognition by government must now be a springboard for a wider conversation about a cut to hospitality’s VAT to 10%.”
The Treasury have been approached for comment.
