Public supports lower VAT rate

Poll finds support for continued 12.5% VAT rate as the country faces  impending costs crisis

THE general public supports keeping the VAT rate at 12.5% as the cost of living rises, according to a new poll.

Trade group UK Hospitality said 92% of respondents to a recent consumer study said their cost of living has risen since the pandemic, with 67% saying they are cutting back on meals out as a result.

Only 17% of respondents (21% when those without an opinion were discounted) said they thought the VAT rate should return to 20% in April, as it is currently slated to do.

The survey, commissioned by UK Hospitality and carried out by YouGov, interviewed 1743 adults from across the UK. Nearly half of respondents said they thought the current 12.5% VAT rate should be retained long-term, with 72% of respondents believing the government has a responsibility to ensure hospitality businesses recover from the impact of the pandemic.

In addition to dealing with price increases, the coming months will see the trade hit by additional costs including rises to the Minimum Wage and National Insurance contributions as well as the resumption of business rates.

“After two extremely challenging years and, with the unfolding cost of living crisis, there is now a very strong case for the government to use the next Budget to deliver the vital support that these surviving and indebted businesses need, to protect jobs and defend the current fragile recovery,” said UK Hospitality chief executive, Kate Nicholls.

“Holding VAT at 12.5% will provide vital support for thousands of small, local, community businesses. It will protect jobs at a pivotal moment for the recovery.

“This research shows that our guests are feeling the pinch and that is hugely concerning for an industry and its workforce that are reliant on discretionary spending. Extending the existing VAT rate of 12.5% will help hospitality operators to hold down their prices, secure jobs and will help keep a lid on inflation.”