Farming News - Budget Responses - 5% VAT extension lifeline for hospitality & tourism
Budget Responses - 5% VAT extension lifeline for hospitality & tourism
Mark Bridgeman, President of the Country Land & Business Association has commented on Rishi Sunak's budget proposals.
VAT cut extended for further six months
“The extension of the 5% VAT rate is a lifeline for many small tourism and hospitality businesses who have faced crippling consequences of the Covid-19 pandemic. It will allow tens of thousands of businesses breathing space to begin their recovery in 2021, further boosted by hopes of a bumper summer season as lockdown restrictions are eased further.
“But the extension is a short-term crisis response. Government should now begin thinking of how the UK’s tourism and hospitality sectors can thrive in the long term. If we are to compete with other major tourism destinations in Europe – all of whom have VAT rates far below 20% - the UK’s VAT rate should remain at 5% permanently. We estimate this move would add £4.5bn to the national economy, leading to more demand, more investment and more good jobs being created.”
“The past 12 months has led to huge changes in the performance of many rural businesses especially in the leisure, hospitality and tourism sectors, with reduced turnover combined with extra costs of sanitisation. Therefore, an extension of the Business Rates holiday until the end of June is welcome news for the sector and is something the CLA has been lobbying intensively for.”
FDF's Chief Executive, Ian Wright CBE, said:
“Food and drink manufacturers will welcome today’s Budget. The Chancellor’s announcement struck the right balance between supporting recovery and acknowledging the difficult choices that have to be made to restore the country’s finances. Food and drink businesses supplying the hospitality and food service sectors will welcome the extension of the furlough scheme. However, we have concerns that support tapers too soon and should be kept under review.
“As the UK’s largest manufacturing sector, we welcome the news that the Bank of England and the Chancellor are doubling incentive payments for businesses hiring apprenticeships. However, increased flexibility of the apprenticeship levy would enable the system to work for the wider food and drink supply chain, particularly SMEs, and must be considered in relation to any new incentives.
“The Chancellor rightly expressed his firm intention not to increase the cost of living and has recognised the importance of encouraging investment as the key driver of recovery. He should therefore review proposed regulatory changes that will increase food prices.”