Hospitality Industry: VAT
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of current VAT rates on the viability of independent hospitality businesses in England.
Answered by Dan Tomlinson
At £90,000, the UK has the second highest registration threshold among all 38 OECD countries, which keeps the majority of businesses, including independent hospitality businesses, outside the VAT system.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. The UK’s standard VAT rate is close to the OECD average of 19.3 per cent.
The Government is supporting hospitality through targeted measures, including permanently lower business rates multipliers, a £4.3 billion business rates support package, and the temporary Great British Summer Savings scheme, which will reduce VAT from 20 per cent to 5 per cent on eligible family attractions and children's menu meals between 25 June and 1 September.
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