UKHospitality calls for VAT and rates support and more in submission to Treasury

Hospitality businesses urgently require further Government investment and support so that the sector can fulfil its potential in helping to drive wider economic recovery UKHospitality has warned as part of its evidence to the Treasury Select Committee Inquiry into the Economic Impact of Coronavirus.

It  has two clear proposals to drive this growth:

  • Extend the VAT cut to 5% to for a further 12 months, and ensure it applies across the broad hospitality sector, to stimulate economic activity
  • Enact a further business rates holiday for hospitality for 2021/22 to protect communities and repair businesses.

Additional measures needed to support businesses, contained within the submission, include:

  • Implement a reformed Job Retention Bonus to allow continued investment in the workforce
  • Extend the repayment and interest-free period for all Government-backed loans to 10 year.
  • Defer tax payments further, to December 2021, to allow full trading before debts to Government fall due.
  • Extend CJRS until the end of June, allowing flexible furlough
  • Assist the hospitality supply chain so it can support the sector’s recovery

UKHospitality Chief Executive Kate Nicholls said, “Put simply, hospitality is battling for survival. Our sector has been the hardest hit sector by the pandemic and is staring into the abyss. But if the right conditions and support are put in place, we could be justifiably optimistic of the future role hospitality can play in returning the country to growth and boosting employment.

“The VAT cut and business rates holiday were two key measures that the Government correctly identified in 2020 that would stimulate economic activity and assist businesses. With subsequent lockdowns and restrictions, many in hospitality have been unable to recoup the intended benefits. Extending these measures would act as a critical revival system – saving many jobs and setting up the economy for much need job creation for the rest of the year.”

UKHospitality also highlighted that four in 10 sector businesses stated that they would fail by mid-2021. Only one in five have enough cash flow to survive beyond February under present levels of support with figures from its quarterly sales tracker, in partnership with CGA, showing sales in the sector collapsed by 54% sector resulting in a loss in revenue of £72bn more than 10 times worse than the impact of the 2008 financial crisis for hospitality.

The evidence builds on previous submissions given by UKHospitality to the Treasury Committee and the recent Budget submission to the Treasury.

 

 

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