'Any further increase would be the final nail in the coffin': Calls for VAT rate reduction for hospitality to be made permanent
More than 2,600 signatories have backed a petition calling for the VAT rate reduction to be made permanent with the creation of a 12.5 percent tourism tax, as the industry faces ongoing price rises, staffing issues and now, the consequences of fresh covid restrictions as Christmas approaches.
The petition, launched by The Wonky Table founder Andy Lennox, and backed by UKHospitality and Deliveroo, is calling for a permanent extension of the lower rates and the creation of a 12.5% Tourism Tax in order to safeguard hospitality businesses' future, protect jobs and enable the UK’s economic recovery.
Following the news that the government will be introducing its so-called 'Plan B' to tackle the spread of coronavirus, founder of The Wonky Table group, restaurateur Andy Lennox repeated calls for people to sign the petition calling for a permanent introduction of 12.5% VAT for hospitality.
He told The Staff Canteen: "Hospitality faces a perfect storm. Rising inflation, rising prices, rising wages and now a disastrous Christmas (again!), There is no support out there and while many may feel the VAT is giving us a 'bonus,' it's not. It's keeping us alive. This now has to be permament.
"Any further increase would be the final nail in the coffin. We're calling on hospitality to awaken once more and realise they are in the perfect storm. They just may not know it right now."
Please make sure you sign the petition asking the govt not to increase VaT for hospitality but to keep it at 12.5%. If they are planning to cut taxes before an election not hiking them in April would be a positive step https://t.co/o4I0vmtAGb
— Kate Nicholls (@UKHospKate) December 3, 2021
Great to see @Deliveroo getting behind the campaign to keep the VAT at 12.5% @Wingers76 @PaulCharity1 @UKHospKate @AndyJCLennox #vat #deliveroo #hospitality https://t.co/evxGMgvlUC
— The Wonky Table (@wonky_table) December 7, 2021
Under the Treasury's current plans, hospitality and tourism VAT will return to its pre-pandemic level of 20 percent in April 2022, having risen from a 5 percent rate in October.
The campaign has been ongoing since the government announced that it would gradually return to a 20 percent rate in April 2022, as the industry warned that a return to 20 percent would lead to cutbacks, job losses, and outright business closures.
CEO of UKHospitality, Kate Nicholls said: "With fragile consumer confidence further damaged by the impact of the new Omicron variant, at the start of what should have been a key trading period for the sector, on top of ever-rising costs, chronic staff shortages and ongoing supply chain issues, the Government needs to act to support hospitality businesses.
"The best option for the Government would be to retain the 12.5% VAT rate for hospitality and tourism, to allow businesses to invest in staff and skills, keep trading back to prosperity, helping the wider national recovery and keep prices affordable for consumers."
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