Hospitality Industry: VAT

Treasury written question – answered on 12th February 2021.

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Photo of Mark Menzies Mark Menzies Conservative, Fylde

To ask the Chancellor of the Exchequer, what recent assessment he has made of the economic effect on the hospitality sector of the reduced rate of VAT for customers and businesses in that sector.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

The temporary reduced rate of VAT (five per cent) was introduced to support the cash flow and viability of over 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors. This relief comes at an estimated cost to Government of over £2 billion and is therefore expected to have benefited the sector by reducing its VAT liabilities by this amount.

The Government keeps all taxes under review, and any future decisions on tax policy will be made at Budget.

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