Hospitality Industry: VAT

Treasury written question – answered am ar 9 Chwefror 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party, Belfast South

To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential impact of reducing VAT for the hospitality industry.

Photo of Nigel Huddleston Nigel Huddleston The Financial Secretary to the Treasury

Since the start of the pandemic, over £37 billion has been provided to the tourism, leisure and hospitality sectors in the form of grants, loans and tax breaks.

The Government announced a package of business rates support at Autumn Statement 2022 which means businesses in the retail, hospitality and leisure sectors, including pubs, will receive a tax cut worth over £2 billion in 2023-24. The UK also has a higher VAT registration threshold than any EU Member State and the second highest in the OECD, which keeps most businesses out of the VAT system altogether.

VAT is the UK's third largest tax forecast to raise £161 billion in 2023/24, helping to fund key spending priorities such as important public services, including the NHS, education and defence. The previous VAT relief for tourism and hospitality cost over £8 billion and reintroducing it would come at a significant further cost.

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