As part of the Autumn statement 2025, Reeves confirmed that many factors were set to change including rises in National insurance rates, rent, business rates as well as wage rises.
Within today’s (Wednesday 26 March) statement, however, VAT was not mentioned.
Operator of the Hand & Flowers, Tom Kerridge previously expressed his thoughts on VAT. He said: “The biggest thing we need is a reduction in VAT. At the end of COVID, the reduction allowed businesses to operate, repay loans, invest in staff and operate like a correct business.”
He continued: “A reduction in VAT would release a pressure valve and allow them to get through the next 12 to 18 months as opposed to thinking, ‘can I get through the next 12 to 18 minutes’?”
Meanwhile, NTIA CEO Michael Kill this week said the reduction of VAT to 15% for hospitality was a “critical measure” to avert a looming crisis.
NTIA chair, Sacha Lord also commented on the effect of tax hikes. He said: " Since 2019, more than 23,000 businesses have collapsed, stripping the economy of more than than £95bn. Yet, instead of offering relief the Government continues to pile on pressure with tax hikes and rising costs."
Speaking on a critical need for VAT reduction, more than 20 key figures in the industry recently called for an immediate reduction of VAT to 15% for hospitality, events, and cultural sectors. This was put forward in a letter to the Chancellor Rachel Reeves.
The letter also mentioned international examples of VAT reductions. It cited Irelands hospitality VAT cut which came in 2011 alongside Germany’s recent choice to hold a lower VAT rate, in order to keep its hospitality sector thriving and in tact.
The letter indicates that the UK currently remains one of the highest taxers of small businesses in Europe, which according to the letter puts the industry at a “severe competitive disadvantage.”
More to follow
