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UK hospitality and tourism industry demands PERMANENT cut to VAT to help ‘fragile’ industries

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Hospitality and tourism industry demands PERMANENT VAT cut to help ‘fragile’ industries as temporary 5% tariff introduced during pandemic ends TODAY

  • An emergency rate cut from 20% to 5% for hospitality began in July last year
  • But it ends today, with the rate going up to 12.5 percent for six months
  • Will return to 20% at the end of March unless changes are made beforehand
  • Companies warned industry remains fragile and jobs could be at risk










VAT must be permanently reduced for ‘fragile’ hospitality and tourism businesses, ministers were told today as a temporary Covid cut came to an end.

Rishi Sunak cut an emergency tariff from 20 percent to 5 percent on hospitality in July last year in an effort to help, first hammered by the first Covid lockdown.

But it ends today, with the rate going up to 12.5 percent for six months until it returns to its original level in April unless later changes are made.

However, with the furlough also ending today, companies warned that businesses in the sector remain fragile and jobs could be at risk.

The public remains cautious and the workplaces are not yet 100 percent occupied – many people choose to work from home permanently.

Kate Nicholls, chief executive of UKHospitality, said: ‘With companies currently holding record numbers of vacancies, we hope that job seekers will consider the varied and exciting opportunities that a career in the hospitality industry offers.

“With the right support and conditions, the sector has the potential to lead the economic recovery.

“To boost further employment, we are urging the government to implement a long-awaited corporate rate reform and a permanent lower VAT rate for hospitality and tourism to help vulnerable businesses get back on their feet.”

An emergency tariff cut from 20 percent to 5 percent was introduced by Rishi Sunak last July in an effort to help, first hammered by the first Covid lockdown.

Kate Nicholls, chief executive of UKHospitality, said: 'In order to create more jobs, we are urging the government to implement a much anticipated reform of corporate rates and a permanent lower VAT rate for hospitality and tourism to help vulnerable businesses return. help out.  on their feet.'

Kate Nicholls, chief executive of UKHospitality, said: ‘In order to create more jobs, we are urging the government to implement a much anticipated reform of corporate rates and a permanent lower VAT rate for hospitality and tourism to help vulnerable businesses return. help out. on their feet.’

Rishi Sunak today unveiled a £500m ‘family support fund’ as ministers moved to rid the UK of Covid money – on furlough, the universal credit increase and VAT cuts coming to an end.

The chancellor said the funding would provide a “lifeline” as the country faces a cost of living crisis over the winter, with supply chain chaos driving inflation and energy bills skyrocketing.

Municipalities will receive money to distribute to struggling families so that they can afford ‘essential things’ such as heating, food and clothing in the coming months. Between three and four million of the poorest households are expected to benefit from around £100 each.

But the initiative was immediately criticized by Labor as an ‘inadequate band-aid’, designed to provide coverage for the Tories as they kicked off their party conference this weekend.

Ministers have admitted that jobs will disappear if the leave scheme ends today, although they insist there are ‘opportunities’ with huge numbers of vacancies in the economy.

The universal credit increase of £20 a week is also coming to an end – which far outweighed the household fund, costing taxpayers the equivalent of £6 billion a year.

The stamp holiday and the VAT breaks for the catering industry are also closing.

Meanwhile, the energy price cap coming in on October 1 will push energy bills up by an average of £140, just as the supply chain crisis is pushing food prices up.

The government has always insisted that extra cash and tax breaks were temporary during the pandemic, pointing out that significant tax increases were needed to increase that kind of revenue.

Mr Sunak said: ‘Everyone should be able to afford the essentials, and we are committed to ensuring that this is the case.

“Our new Household Support Fund will provide a lifeline for those at risk of having trouble keeping their accounts in the winter, adding to the support the government is already providing to help people with the costs of livelihood.’

The new fund will be in effect in England over the winter, urging people to contact their local council for access.

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