The industry leaders have collectively called for a permanent reduced rate of VAT for hospitality and tourism to help them to recover from the Covid-19 pandemic.

The letter highlights the benefits of a permanent 12.5% of VAT for the industry, including:

• Putting a halt to price rises for hard-working families
• Enabling the industry to generate new jobs
• Supporting higher wages and better training
• Unlocking capital to deliver a greener future
• Allowing businesses in the sector to remain globally competitive.

Kate Nicholls, chief executive of UKHospitality, commented: “Hospitality is a critical component of the UK economy, with the potential to be at the heart of the Government’s plans to Build Back Better. We can support job creation, levelling up and the road to net zero – but we need the Government to come with us on our recovery journey.

“Under current plans, VAT returns to its pre-pandemic level of 20% next April, meaning higher prices for consumers just at the time when they can least afford it. For businesses it will undoubtedly set off an inflationary spiral which will undermine wage growth, hit demand and ultimately threaten jobs.”