Budget: trade bodies call for Chancellor to lower VAT for the sector

By Michelle Perrett

- Last updated on GMT

Economic recovery: trade bodies are calling for help for the industry in the Budget
Economic recovery: trade bodies are calling for help for the industry in the Budget

Related tags: Budget, Vat, Public house, Beer

Trade bodies have called on the Chancellor Rishi Sunak to cut VAT and duty rates in the Budget on 27 October to help the sector recover after the challenges of the Covid-19 pandemic.

The British Beer & Pub Association (BBPA) has called on the Sunak to cut beer duty, extend business rates relief for pubs beyond 1 April 2022 and permanently lower VAT for all food and drink sold in pubs. 

In its submission, the BBPA has highlighted the vital role pubs and brewing play in supporting over 900,000 jobs in communities across the UK and contributing £26bn to the UK economy across towns, villages and cities.

It said if the Government is serious about 'Building Back Better' and 'Levelling Up', it must invest in pubs and brewers who have a leading role to play in the recovery as they come through the pandemic and continue their world-leading status.

Positive role

The trade association also highlighted how pubs and brewers play a positive role in communities, are a force for good for mental health and sociability, and employ a high proportion of young adults.  

Emma McClarkin, chief executive of the BBPA, said: “Investing in our brewers and pubs is investing in our communities and society to build back better.

“The Government must do this by reforming VAT, beer duty and business rates, which currently place an unfair burden on pubs and other hospitality businesses.

“In return, we will create jobs, boost the local economy and help our communities reconnect and unite again.” 

Meanwhile, the Wine & Spirit Trade Association (WSTA) has called on the Treasury to freeze wine and spirit duty and extend the hospitality VAT reduction in the Autumn Budget to allow the country to climb out of the Covid-19 slump. 

Slowing economic recovery

In its submission, it appealed to the Chancellor to give British business and consumers a break in the face of a slowing economic recovery, rising inflation, rising energy costs and surging fuel prices.

It said that UK wine and spirit businesses support more than 360,000 jobs across the supply chain as well as bringing in around £50bn annually to the British economy.

To support the hospitality industry in its recovery, the WSTA is asking the Government to keep the lower rate of VAT for hospitality, but also to broaden the scheme to include alcoholic drinks.

Miles Beale chief executive of the WSTA, said: “After more than 18 difficult months, and with the prospect of rising prices and falling consumer confidence, we are calling on the Government to keep alcohol duty rates as they are until after it has completed its alcohol duty review. Freezing wine and spirit duty at the Budget will give businesses and consumers a much-needed break, which will be vital for our sector’s the road to recovery." 

Related topics: Legislation

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