Over 250 hospitality leaders write to chancellor urging VAT freeze
More than 250 hospitality and leisure business leaders have written to the Chancellor urging the government to freeze VAT at 12.5% from April.
Representatives from Wagamama, Caffè Nero, Marston's, CH&Co and the Corinthia London hotel are among 261 signatories, alongside UKHospitality chief executive Kate Nicholls.
The letter warns that the 12.5% rate has been "critical in keeping prices affordable" for customers and that a return to the pre-pandemic level of 20% would "exacerbate the squeeze on household finances" at a time of high inflation.
Nicholls said: "We are asking the chancellor to give companies and consumers room to breathe. We have had a very challenging two years where hospitality was hit first, hardest and longest.
"This industry has borne the full brunt of the economic restrictions due to Covid. Companies have no cash in the bank and are being squeezed from all directions. They must pass costs on or go bust. The only question is by how much prices rise."
In a recent study of UKHospitality members, 93% of companies said they intended to increase their prices by 11% in the next few months – double the headline rate of inflation in December 2021.
A report commissioned by UKHospitality, the British Beer & Pub Association (BBPA), the Tourism Alliance and the Association of Leading Visitor Attraction found that keeping the 12.5% inflation rate over the next decade could create 286,850 jobs, generate an additional £7.7b of additional turnover and deliver £4.6b in fiscal gains to HM Treasury.
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