Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what comparative assessment his Department has made of the forecast fiscal and economic impacts of (a) maintaining current hospitality taxation with (b) reducing VAT, employers’ National Insurance contributions and business rates.

The Government has considered the fiscal and economic impacts of proposals to reduce VAT, employer National Insurance contributions and business rates. Analysis indicates that reducing VAT for the hospitality sector to 10 per cent would cost around £11bn in 2026-27.

The Government has already started the work of reforming our business rates system by introducing new permanently lower multipliers for eligible RHL properties. These new multipliers provide nearly £1 billion per year of support and benefit over 750,000 properties.

The Employment Allowance has also been increased to £10,500, meaning around 900,000 employers will have no employer National Insurance liability, while businesses can benefit from targeted reliefs that support the employment of young people

A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer NICs. The TIIN sets out the impact of the policy on the exchequer, the economic impacts of the policy, and the impacts on individuals, businesses, and civil society organisations, as well as an overview of the equality impacts.