VAT slashed to 5% for hospitality sector
Chancellor Rishi Sunak has slashed VAT on hospitality and tourism from 20 per cent to 5 per cent for six months, as the government seeks to revive the UK economy after months of lockdown.
In an unprecedented announcement in the Commons today, Sunak vowed to cut the VAT rate from next Wednesday until 12 January 2021.
“I’ve decided for the next six months to cut VAT on food, accommodation and attractions,” he said. The reduction will apply to “eating hot or takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites, and caravan sites.”
The VAT cut will also include attractions such as cinemas, theme parks and zoos.
“This is a £4bn catalyst for the hospitality and tourism sectors benefiting over 150,000 businesses and consumers everywhere,” said Sunak, adding that the new measure would help protect £2.4m jobs in the UK.
Date night discount
The chancellor also announced a ‘Eat Out to Help Out’ discount scheme to encourage consumers to visit restaurants, cafes and pubs.
The discount will be eligible from Monday to Wednesday at every participating UK business, up to a maximum of £10 per head, including children.
“This has never been tried in the UK before,” said the chancellor. “This moment is unique. We need to be creative.”
Mr Sunak said businesses could register from next Monday and then claim the money back within five working days.