Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has plans to extend the 5 per cent VAT rate in response to the covid-19 outbreak for indoor leisure to March 2022.

The temporary reduced rate of VAT (5 per cent) was introduced on 15 July 2020 to support the cash flow and viability of about 150,000 businesses and protect over 2.4 million jobs in the hospitality and tourism sectors. Admission to leisure centres is not included within the reduced rate, but where a leisure centre operates activity that falls within the reduced rate, e.g. an on-site café, that service will qualify.

As announced at Budget 2021, the Government has extended the temporary reduced rate of VAT for hospitality and tourism and it will now end on 30 September 2021. In addition, to help businesses manage the transition back to the standard rate, a 12.5 per cent rate will then apply for a further six months, until 31 March 2022.

This relief already comes at a £7 billion cost to the Exchequer, and there are no plans to extend the scope of the reduced rate. While some businesses in some sectors are disappointed, a boundary for eligibility had to be drawn.

The Government has made available a comprehensive wider package of support which includes extensions to the furlough scheme; extensions to the COVID-19 loan schemes; grant support; a business rates holiday for all retail, hospitality and leisure business properties; mortgage holidays; enhanced Time to Pay for taxes; and VAT deferrals.