MPs back calls for hospitality VAT cut in parliamentary debate

15 February, 2024

MPs have supported proposals to cut VAT for the hospitality sector during a recent parliamentary discussion.

Spearheaded by Alyn Smith, SNP representative for Stirling, the debate in Westminster Hall highlighted a cross-party consensus on the urgent need for government intervention.

Ahead of the impending spring budget announcement on 6th March 2024, parliamentarians reiterated the industry's main demands, which include VAT reduction, mitigation of forthcoming business rate hikes in April, and a comprehensive overhaul of the current framework.

Alyn Smith said:

"Am I looking for special treatment for the hospitality sector? Yes. I think they need it and I think they deserve it. I think they need it because of unprecedented economics times we're living through and they deserve it because these businesses are not just part of our economy.

They're a part of our society, they're community hubs, they contribute to our sense of place, they keep our high streets busy. So, what am I calling for? If you remember only two words from me today, it is cut VAT."

Tobias Ellwood, MP for Bournemouth East (Conservative), said the hospitality sector was "screaming out that VAT is too high".

Ellwood added:

"Please reconsider the decision to raise VAT to 20%, otherwise you will face ever more business closures and subsequently raise less tax for the Exchequer."

Steve Double, MP for St Austell and Newquay (Conservative), commented:

"I think we need more fundamental reform of business rates for the hospitality sector to reduce the burden of that particular tax."

Tim Farron, Liberal Democrat MP for Westmorland and Lonsdale expressed optimism that policymakers would heed these concerns and lend support to a sector poised to significantly bolster the nation's economy.

Rachael Maskell, MP for York Central (Labour), said:

"The hospitality sector is at the sharp end of all markets sensitivities. It feels every economic challenge acutely. The sector needs support."

Despite the government's previous dismissal of proposals to lower VAT for hospitality, citing a lack of plans last April in response to a petition attracting over 17,000 signatures, momentum persists. Andy Lennox, proprietor of the Fired Up hospitality group in Dorset, has launched a fresh petition garnering over 14,000 signatories, collaborating closely with his local MP, Ellwood, on this front.

UKHospitality, outlining a strategic three-point agenda for 2024 as the country braces for an impending general election, hailed the bipartisan backing witnessed during the debate as a positive sign.

Kate Nicholls, chief executive of UKHospitality, commented:

"It was excellent to see so many MPs attend the debate, responding to our calls and those of hundreds of hospitality businesses that urged them to do so.

It's evident from the debate that MPs recognise the challenges facing the sector and back our calls for urgent action. There was particular cross-party support to lower the rate of VAT and reform business rates – all priority asks of ours.

I hope the strength of feeling shown today is heard loud and clear by the government and that they take the necessary action in the budget to help this strategically important sector."

With Prime Minister Rishi Sunak mandated to call the upcoming election before 28 January 2025, marking five years since the current parliamentary term commenced, the stage is set for pivotal decisions regarding the hospitality industry's future.

Source: The Caterer

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