Hospitality: The VAT nightmare

The UK Government has recently announced its intentions to restore hospitality VAT to its pre-pandemic level in the coming months – as a result, the sector will see it rise from 12.5% to 20%. UK Hospitality says it has “major concerns” that once the figure returns to its standard that businesses will have no choice but to significantly raise their prices, “putting pressure” on the cost of hospitality experiences. It has even declared the rumoured price rises for consumers now “inevitable.” The institution correspondingly predicts “many” hospitality venues to fail, proposing the planned increase in VAT, employment costs and business rates proving “one financial burden too many”, or as Lionel Benjamin, co-founder of AGO Hotels describes, “the straw that broke the camel’s back.”

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