Hospitality Industry and Tourism: VAT

(asked on 4th February 2021) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what the budgeted cost to the Exchequer is of the reduction to 5 per cent VAT for hospitality and tourism sales between 8 July 2020 and 31 March 2021; how much of that cost has been accrued; and what the projected final cost of that policy is.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 9th February 2021

The Exchequer cost of the temporary reduced rate of VAT for hospitality, accommodation and attractions until 31 March 2021 was set out at Spending Review 2020. The estimated cost is £2,540m, as shown in Table 1.1: https://www.gov.uk/government/publications/spending-review-2020-documents.

This costing has been certified by the Office for Budget Responsibility.

The actual cost to date is not available owing to the lags in VAT reporting, and the final cost will depend on the level of demand and the extent of restrictions during the period of the relief.

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