UKH urges for VAT and rates support after ‘worst year on record’

UKHospitality has called for a further extension of VAT and business rates support from the government after the “worst year of trading on record” has left enormous swathes of the hospitality sector on the “verge of collapse”. 

The plea follows recent figures from UKHospitality’s quarterly sales tracker, in partnership with CGA, which reveal the impact of the pandemic to the sector in 2020 – with sales collapsing by 54% sector resulting in a loss in revenue of £72bn. 

According to the group, the sector’s decline is likely to have knocked off over “two percentage points from total national GDP”. A statistic which suggests that the impact of Covid-19 on the hospitality sector is “more than 10 times worse than the impact of the 2008 financial crisis”.

To prevent further casualties UKH is calling for the government to extend the VAT cut to 5% for a further 12 months, and to “ensure it applies across the broad hospitality sector, to stimulate economic activity”. 

Furthemore the group has requested a further business rates holiday extension for 2021/22 to “protect communities and repair businesses”.

Kate Nicholls, chief executive, UKH said: “Put simply, hospitality is battling for survival. Our sector has been the hardest hit sector by the pandemic and is staring into the abyss. 

“But if the right conditions and support are put in place, we could be justifiably optimistic of the future role hospitality can play in returning the country to growth and boosting employment.”

She added: “The VAT cut and business rates holiday were two key measures that government correctly identified in 2020 that would stimulate economic activity and assist businesses. 

“With subsequent lockdowns and restrictions many in hospitality have been unable to recoup the intended benefits. Extending these measures would act as a critical revival system – saving many jobs and setting up the economy for much need job creation for the rest of the year.”