Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment on the potential merits of reducing the rate of VAT paid by hospitality businesses.

The previous VAT relief for tourism and hospitality cost over £8 billion. Reintroducing it would come at a significant further cost, reducing the money available to help fund key spending priorities, including important public services, such as the NHS, education and defence.

The Government has been clear that this was a temporary measure designed to support the cash flow and viability of sectors that have been severely affected by COVID-19.

At Autumn Statement 2022, the Government announced an increased 75 per cent relief for retail, hospitality and leisure properties in England, up to a cash cap of £110,000 per business for 2023-24. This is a tax cut worth over £2 billion for around 230,000 businesses, to support the high street and protect small shops.

Business rates relief is a devolved policy area and the Welsh Government is responsible for business rates policy in Wales. Barnett consequential funding for any reliefs will be provided to the Devolved Administrations.

While there are no plans to reduce the rate of VAT paid by hospitality businesses, the Government keeps all taxes under review.