Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had with the Secretary of State for Business, Energy and Industrial Strategy on the potential merits of reducing the VAT charged on food and drink served in pubs.

The Chancellor regularly engages with the Secretary of State for Business, Energy and Industrial Strategy on a range of issues.

The temporary reduced rate of VAT was introduced on 15 July 2020 to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs in the hospitality and tourism sectors. On 1 October 2021, a new reduced rate of 12.5 per cent was introduced for these goods and services to ease affected businesses back to the standard rate. The relief ended on 31 March 2022.

The VAT reduced rate for the hospitality sector was a temporary measure designed to support the cash flow and viability of sectors that have been severely affected by COVID-19. It was appropriate that as restrictions were lifted and demand for goods and services in these sectors increased, the temporary tax reliefs were first reduced and then removed in order to rebuild and strengthen the public finances.

VAT is the UK’s third largest tax forecast to raise £157 billion in 2022/23 helping to fund key spending priorities such as important public services, including the NHS and policing. In addition, this request should be viewed in the context of over £50 billion of requests for relief from VAT received since the EU referendum.

While there are currently no plans to reduce the rate of VAT for the hospitality industry, the Government keeps all taxes under review.