Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make it his policy to reduce the level of VAT applying to the hospitality sector; and if he will make a statement.

The previous VAT relief for tourism and hospitality cost over £8 billion.

The Government has been clear that this was a temporary measure designed to support the cash flow and viability of sectors that have been severely affected by COVID-19.

We have continued to support and encourage the hospitality sector through other measures since then. At Autumn Statement 2022, the Government announced a package of changes and cuts to business rates worth £13.6 billion over the next five years, including an increased 75 per cent relief for retail, hospitality and leisure properties, up to a cash cap of £110,000 per business for 2023-2024. This is a tax cut worth over £2 billion for around 230,000 RHL businesses, to support the high street and protect small shops.

The introduction of a small profits rate of Corporation Tax, from April, keeps the rate at 19 per cent for companies with profits of £50,000 or less. This means around 70 per cent of actively trading companies will not see an increase in their Corporation Tax rate. The availability of marginal relief for companies with profits of between £50,000 and £250,000 means only around 10 per cent of actively trading companies will pay the full 25 per cent.

While there are no plans to reduce the rate of VAT paid by hospitality businesses, the Government keeps all taxes under review.