​Parliamentary Debate Amplifies Call for VAT Reduction in UK Hospitality Sector

​Parliamentary Debate Amplifies Call for VAT Reduction in UK Hospitality Sector

Posted by Emily on 1st Feb 2024

MPs from various parties supported the call for enhanced governmental aid to the hospitality industry, notably advocating a VAT reduction. This critical debate, initiated by Alyn Smith, SNP MP for Stirling, saw a unanimous agreement on the necessity of government intervention to aid the sector, particularly in light of the upcoming spring budget scheduled for 6 March.

Alyn Smith argued for "special treatment" for the hospitality sector, citing both economic turmoil and the intrinsic societal value of these businesses. He emphasised their role as community hubs and their contribution to the vibrancy of high streets with a clear message: "Cut VAT."

Echoing this sentiment, Tobias Ellwood, Conservative MP for Bournemouth East, highlighted the sector's outcry over the high VAT rates, warning of increased business closures and reduced tax revenue for the Exchequer if VAT is not reconsidered. Steve Double, Conservative MP for St Austell and Newquay called for a more fundamental overhaul of business rates for the hospitality sector to alleviate the tax burden.

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Liberal Democrat MP Tim Farron for Westmorland and Lonsdale voiced hope that ministers would acknowledge these concerns, stressing the sector's potential to boost the economy significantly. Labour MP Rachael Maskell for York Central underlined the acute sensitivity of the hospitality sector to economic challenges, emphasising its need for support.

This parliamentary session comes after a government declaration last April stating there are "no plans" to reduce hospitality VAT despite a petition garnering over 17,000 signatures. Subsequently, Andy Lennox of the Fired Up Hospitality Group in Dorset initiated a new petition, already receiving over 14,000 signatures, working alongside his local MP, Tobias Ellwood.

Kate Nicholls, CEO of UKHospitality, expressed optimism over the cross-party support for lowering VAT and reforming business rates, critical demands of their campaign. This discussion occurs as the UK gears up for a general election in 2024, with Prime Minister Rishi Sunak required to call the next election before 28 January 2025.

The debate marked a significant moment for the hospitality industry. MPs from across the political spectrum joined forces in highlighting the sector's struggles and the urgent need for government action. The consensus amongst MPs underscored the strategic importance of the hospitality sector to the UK economy and society, making a compelling case for a VAT cut and broader fiscal support.

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