Budget 2021: Sunak keeps VAT at reduced rate for hospitality and tourism firms
The five per cent reduced rate of VAT for the hospitality sector will continue for another six months, the Chancellor has announced.
As part of a new raft of measures to help the hospitality sector recover from the pandemic Rishi Sunak told the House of Commons the reduced rate would be extended until 30 September.
“One of the hardest hit sectors has been hospitality and tourism: 150,000 businesses that employ over 2.4m people need our support,” he said.
He also announced there will be an interim rate of 12.5 per cent for another six months until April 2022.
In total the move will see VAT cut by around £5bn.
Sunak first cut VAT from 20 per cent to five per cent for food, drink and hospitality businesses as part of his mini-budget last July. The Treasury then extended the reduced rate until the end of this month.
VAT, which is the tax paid to HMRC on the items or services they sell, has been slashed for restaurants, cafes and pubs as well as hotels, theatres and other events like concerts and cinemas.
More to follow