Following the launch of celebrity chef Tom Kerridge’s #VATsTheProblem campaign earlier this week, calls have intensified for VAT to be reduced from 20% to 10% for hospitality businesses.
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The campaign, which has been backed by a number of trade bodies, has added to growing pressure on the Government over taxation for the sector.
Against that backdrop, MP for Canterbury Rosie Duffield pushed Starmer to acknowledge the pressure facing hospitality businesses across the country during Prime Minister’s Questions on Wednesday 3 June.
Killing businesses
Duffield told the House of Commons she had recently hosted a meeting with industry leaders from Manchester, Liverpool and Kent, including chair of the Night-Time Industries Association (NTIA) Sacha Lord, to discuss the compounding issues eroding margins.
“The UK’s rate of 20% VAT for hospitality is killing businesses,” she told ministers.
Duffield then questioned the Prime Minister, asking if he felt VAT was a problem for the hospitality sector and urging him to slash the rate in line with the rest of the EU.
“That is why we are permanently lowering business rates for retail, hospitality and leisure businesses”, Starmer responded.
“Every pub will get 15% off its new business rates bill and bills will be frozen in real terms for a further two years.
Token gesture
“In relation to VAT…we are supporting by cutting VAT on children meals in restaurants, particularly the summer period with the savings that were set out two weeks ago by the Chancellor.”
Taking to social media after speaking in Parliament, Duffield slammed the Prime Minister for “ignoring” her question and providing an “inadequate response”, pledging to continue fighting for the hospitality sector.
Last month, Chancellor Rachel Reeves announced the Government would cut VAT to 5% on children’s menu meals in pubs and restaurants from 25 June to 1 September.
However, voices from across the sector lambasted the move, with some criticising the narrow scope of the support and others describing it as a “token gesture”.
