Amusement Arcades: VAT

(asked on 21st January 2021) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason the VAT reduction to five per cent was not granted to amusement arcades.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 26th January 2021

The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of over 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and will run until 31 March 2021.

Hospitality for the purposes of this relief includes the supply of food and non-alcoholic beverages from restaurants, cafes, pubs and similar establishments for consumption on the premises. It also includes the supply of hot food and non-alcoholic hot beverages to take away. Where an amusement arcade provides such hospitality, that hospitality will benefit from the reduced rate.

While the Government keeps all taxes under review, this relief comes at a significant cost to the Exchequer, and there are currently no plans to extend the scope of the reduced rate. This policy will cost over £2 billion, and while some businesses in some sectors are disappointed, a boundary for eligibility had to be drawn.

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