The impact of the Spring Budget on hospitality
A word from Mark Watts, Chief Financial Officer in reaction to the Spring Budget.
“The UK hospitality industry has been left in a difficult position over the last two years. As well as being one of the hardest hit, it was one of the first to feel the effects of lockdown and one of the last to return to any semblance of normalcy. Like most businesses in our industry we didn’t qualify for government grants and other forms of funding, instead having to take out government loans which now need to be re-paid.
The return to 20% VAT will present a difficult challenge for hospitality businesses and could cause many to close their doors for good.
Inquiry evidence given to the APPG, via UK Hospitality, has heard how a retention of the 12.5% VAT rate would support in the industry playing a key role in the UK’s wider economic recovery, as well as having a significant role in the government’s wider net zero and levelling up agendas.
So, it is within the wider national interest for the VAT rate not to increase.
This Spring statement was an opportunity for the Chancellor to make a real statement for the industry. If VAT remains at 12.5% then it would at least make some contribution to help mitigate the impacts of continually soaring labour, produce, fuel and energy costs.
Naturally we at Freemans Event Partners would welcome the retention of a 12.5% VAT rate.
Mine is not the only voice calling for the VAT rate to remain as it is. The decisions of the Chancellor on this matter will have significant effects, one way or another, not only on this industry but on the wider economic recovery of the country.”