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Hospitality Industry: VAT

Question for Treasury

UIN HL12014, tabled on 11 January 2021

To ask Her Majesty's Government what plans they have to extend the reduced Value Added Tax rate for the hospitality industry.

Answered on

25 January 2021

The temporary VAT reduced rate came into effect on 15 July 2020 and was initially scheduled to end on 12 January 2021.

In order to continue supporting the cash flow and viability of over 150,000 businesses and to protect 2.4 million jobs, the Government extended the temporary reduced rate of VAT (5 per cent) to goods and services supplied by the tourism and hospitality sectors until 31 March 2021.

While the Government keeps all taxes under review, this relief comes at a significant cost to the Exchequer, and there are currently no plans to extend the length of the reduced rate further.

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