Reduced VAT vital to UK's competitiveness, says UKH

Speaking at a Department for Culture, Media and Sport (DCMS) inquiry on 8 March, UKHospitality (UKH) chief executive Kate Nicholls warned that raising VAT back to 20% next month "will significantly hurt the sector". 

Nicholls said that retaining the current reduced rate of 12.5% for hospitality and tourism is essential if the UK is to remain competitive against international rivals, attracting visitors from abroad and encouraging Brits to go out and spend. 

Nicholls addressed a DCMS select committee enquiry called Promoting Britain Abroad, saying: "There is no other industry that will generate jobs, growth and investment at pace across the UK and deliver levelling up in practice."

She added that lowering VAT for hospitality and tourism during the pandemic prompted an "immediate uptick in demand", claiming that "the more it costs people to go out the less they will do it, the less they have to spend, and the slower the economic recovery". 

Nicholls' select committee contribution comes as UKH intensifies its #VATsEnough campaign ahead of the chancellor's spring statement on 23 March. 

#VATsEnough, which has the backing of leading hospitality operators, urges the government to maintain VAT at 12.5%, warning that the scheduled rise in April could be the final straw for many hospitality businesses already struggling to get back on their feet after two-years of losses. 

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