More than three quarters of consumers support keeping 12.5% VAT

10-Mar-2022 - Last updated on 10-Mar-2022 at 13:17 GMT

Public preference: consumers are in support of keeping the current 12.5% VAT rate (image: Getty/The Good Brigade)

Related tags Legislation Vat Government ukhospitality

Some 79% of consumers do not believe VAT should return to 20% in April, according to new research.

A study by YouGov, commissioned by UKHospitality (UKH) of 1,743 UK adults showed nearly half (49%) of participants wanted the reduced VAT rate be stay for the long-term and almost a third (30%) wanted an extension to the reduced rate.

It also found most of those polled (72%) thought the Government had a responsibility to ensure hospitality businesses recover from the impact of the coronavirus pandemic.

In addition, 92% of respondents reported their cost of living had soared since before the pandemic with two thirds (67%) stating they had cut down on meals out as a result.

UK VAT rate

UKH has repeatedly called on the Government to keep the current 12.5% VAT on food, soft drinks and accommodation as a rise would further fuel inflation across the nation.

If the current rate is kept, hospitality businesses will be able to recover and rebuild following the pandemic, amid a crisis of heavy debt and soaring costs, according to the trade body.

It referenced data that showed the UK has one of the highest rates of tax on food and accommodation in Europe.

France and Spain have 10% VAT rates while Germany and Belgium are at 7% and 6% respectively.

Feeling the pinch

UKH chief executive Kate Nicholls said: “After two extremely challenging years and with the unfolding cost of living crisis, there is now a very strong case for the Government to use the next Budget to deliver the vital support these surviving and indebted businesses need, to protect jobs and defend the current fragile recovery.

“Holding VAT at 12.5% will provide vital support for thousands of small, local, community businesses. It will protect jobs at a pivotal moment for the recovery.

“This research shows our guests are feeling the pinch and that is hugely concerning for an industry and its workforce reliant on discretionary spending.

“Extending the existing VAT rate of 12.5% will help hospitality operators to hold down their prices, secure jobs and will help keep a lid on inflation.”