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Written question asked by Ben Lake (Plaid Cymru) on Monday, 6 March 2023, in the House of Commons. It was due for an answer on Wednesday, 8 March 2023. It was answered by Victoria Atkins (Conservative) on Monday, 13 March 2023 on behalf of the Treasury.

Hospitality Industry: VAT

Question

To ask the Chancellor of the Exchequer, if he make an estimate of the cost to the Exchequer of reducing the rate of VAT levied on hospitality businesses to 10 per cent.

Answer

The Government introduced a temporary reduced rate of VAT for hospitality on 15 July 2020 to support the cash flow and viability of the sector which was severely affected by COVID-19. The relief, which ended on 31 March 2022, cost over £8 billion. The annual cost of a reduced rate of VAT would be greater now that activity in the sector has recovered.

It was appropriate that as restrictions were lifted and demand for goods and services in these sectors increased, the temporary VAT relief was first reduced and then removed in order to rebuild and strengthen the public finances. In response to more recent pressures on businesses, the Government has since announced a new energy support scheme for business, the Energy Bills Discount Scheme, as well as the further business rates reliefs mentioned in my answer to the Honourable Member’s previous question UIN 147209 on 27th February.

The Government keep all taxes under review.

Secondary information

Type
Written question
Reference
159029
Session
2022-23
Related items
Hospitality Industry: VAT
Monday, 27 February 2023
Written questions
House of Commons
Subjects
VAT Tax rates and bands Hospitality industry
Contains statistics
Yes
Link
View this Written question on www.parliament.uk