Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of introducing VAT reductions or subsidies for businesses in the hospitality sector.

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, which were severely affected by COVID-19. The relief, which ended on 31 March 2022, cost over £8 billion.

All taxes are kept under review, but the Government has been clear that this was a temporary measure in response to COVID-19. It was appropriate that as restrictions were lifted and demand for goods and services in these sectors increased, the temporary VAT relief was first reduced and then removed in order to rebuild and strengthen the public finances.