THE “utter devastation” of the UK hospitality industry over the past two years has further reinforced the argument for retaining the current 12.5% rate of VAT, according to trade group UK Hospitality.
The group claims that the pandemic has cost the industry £114 billion in lost sales across 2020 and 2021, the equivalent of 43% of revenue or 45 full weeks of trading, and is now urging the UK Government to retain the current 12.5% VAT rate. VAT is scheduled to return to 20% in April.
Quoting figures from CGA, UK Hospitality reported that, across the UK, full-year revenues for 2021 were 32% – or £43bn – down when compared to 2019.
“These figures lay bare the utter devastation that two years of this terrible pandemic has wreaked on the third largest private sector employer in the UK, with thousands of businesses closed, many on the brink of collapse, and countless jobs lost,” said UK Hospitality chief executive, Kate Nicholls.
“The last thing operators need – and which a lot of them simply wouldn’t survive – is a VAT increase.
“Businesses big and small have been left with depleted cash reserves and crippling debt as COVID loans as well as contending with a gaping hole of 400,000 job vacancies, as more than 80% of hospitality businesses report they have roles to fill.”