Demands for VAT reduction grow as hotel sector falters
Demands are growing for a VAT cut in pubs, clubs and restaurants as the hospitality sector reels from the devastating impact of the train strikes.
Last week’s strikes alone cost the battered industry £360m, according to trade body UKHospitality.
And the series of stoppages has hit London’s economy to the tune of £571 million over the past year, figures from the Center for Business and Economics Research think tank show.
Now one of his key business supporters is urging the Labor Party, which is well ahead in opinion polls, to give the sector a big tax cut.
Sacha Lord, night economic adviser to Greater Manchester Mayor Andy Burnham, wants Labor to commit to reducing VAT for the hospitality and tourism sectors.
Reeling: Demands grow for VAT reduction in pubs, clubs and restaurants
The rate dropped sharply during the Covid lockdowns, but rose again to 20 percent after the economy reopened.
“The 12.5 per cent VAT rate was a lifesaver during the pandemic and must be restored,” Lord said.
He added that this would allow the UK to compete with many European countries where the average rate is lower.
“Ultimately, 12.5 percent of Treasury revenue is better than 20 percent of nothing, which will increasingly be the result if companies fail,” he said.
Lord, a businessman who runs the Parklife music festival, spoke as delegates gathered for this week’s Labor Party conference in Liverpool.