Business rates holiday and VAT cut extension 'essential' for hospitality revival

Ahead of the chancellor's Budget statement in March, UKHospitality has written to Rishi Sunak outlining the additional action needed to ensure the revival of the UK’s hospitality sector.

The trade body has said that in order to ensure the early, rapid return to growth of as many hospitality businesses as possible, the government must extend the VAT cut to 5% for a further 12 months and enact a further business rates holiday for hospitality for 2021/22 to protect communities and repair businesses.

UKHospitality is also urging the government to use the forthcoming Budget to announce additional support to safeguard businesses and jobs, including a reformed Job Retention Bonus, extending the repayment period for all government-backed loans to 10 years with an extra year interest-free, deferring tax payments further to December 2021 to allow full trading before debts fall due, extending the furlough scheme until the end of June, and more assistance for the hospitality supply chain so it can support the sector’s recovery.

UKHospitality chief executive Kate Nicholls said: “Government financial support has been key – the two principal pillars of support, slashing hospitality VAT to 5% and providing a business rates holiday, have helped give employers the lifeline they needed to survive. We know from recent history that hospitality has the economic clout to be in the vanguard of economic recovery once the crisis has passed, but only if essential support is extended.

“A wide-ranging package of financial support will give hospitality businesses the best chance of not just surviving the remainder of the crisis, but leading the UK’s economic recovery in the years ahead. If we get what we need, hospitality can spearhead the economic recovery of the country, revive high streets and provide employment and investment in every single region.”

Photo: Flickr - HM Treasury