VAT must be kept low for leisure and hospitality venues to help save jobs and stop prices from rising this spring, campaigners say.
A temporary cut to five per cent was brought in last year to support sectors struggling in the pandemic.
It is due to end on March 31, but UKHospitality and the Federation of Small Businesses want it extended for another year in next month’s Budget.
The tax affects the cost of a family meal out in pizzerias or pubs as well as staycations in hotels.
It also impacts the price of tickets at cinemas, theme parks and zoos.
Should it rise again to 20 per cent from April, prices will likely shoot up and thousands of jobs could be at risk.
The Resolution Foundation think tank says 53 per cent of hospitality firms have fewer than three months’ worth of cash reserves left and fear having to make redundancies.
Extending the VAT cut could cost £1billion — but would be recouped in tax receipts.
Kate Nicholls, CEO of UKHospitality – which represents over 700 companies operating around 65,000 venues – said: “Keeping the VAT cut is crucial to the survival of hundreds of local pubs, restaurants, cafes, hotels and the millions of people that they employ.
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“When the time is right, our businesses can’t wait to bring the nation back together in safe and welcoming venues.
“If the VAT cut continues, the majority of operators will use it to help them bounce back strongly, create jobs and put a smile back on the face of customers.”
Meanwhile, pub bosses want PM Boris Johnson to set a date for boozers to reopen — and without some of last year’s barmy rules.
The Sun says
TIME is fast running out to save the hospitality industry.
A major study today reveals surprising resilience from British businesses thanks to the Government bailouts.
Hospitality firms are the exception.More than half have less than three months’ cash left.
“Widespread insolvencies and redundancies” now loom.
Rishi Sunak must focus on our pubs, restaurants and hotels before his March Budget.
Extending the VAT cut, job retention scheme and business rates relief will be vital. Grants will be a must.
But some clarity would help too.
Schools have a date for reopening. What about pubs?
The timings are different, because kids are safer than adults.
But modelling must show how low our risk will be by, say, April.
And Covid-secure pubs were never major drivers of the virus.
Show them light at the end of the tunnel.
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