Hospitality Industry and Tourism: VAT

(asked on 17th December 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of extending the 5 per cent VAT rate for tourism and hospitality until at least the end of 2021.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 11th January 2021

The temporary VAT reduced rate came into effect on 15 July 2020 and was initially scheduled to end on 12 January 2021.

In order to continue to support the cash flow and viability of over 150,000 businesses and to protect 2.4 million jobs, the Government extended the temporary reduced rate of VAT to goods and services supplied by the tourism and hospitality sectors until 31 March 2021.

While the Government keeps all taxes under review, this relief comes at a significant cost to the Exchequer, and there are currently no plans to further extend the length of the reduced rate.

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