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Hospitality Industry and Tourism: VAT

Question for Treasury

UIN 913203, tabled on 9 March 2021

If his Department will make an assessment of the potential merits of making permanent the five per cent reduced rate of VAT for the tourism and hospitality sector.

Answered on

9 March 2021

The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of about 150,000 businesses and to protect over 2.4 million jobs in the hospitality and tourism sectors. As announced at Budget, this relief will now run until 31 March 2022, with a staggered return to the standard rate. Applying this relief permanently would come at a significant cost to the Exchequer, and that cost would have to be balanced by increased taxes elsewhere, or reductions in Government spending.

Answered by

Treasury
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