No update on VAT cut or business rates holiday extension until March

12 January 2021 by
No update on VAT cut or business rates holiday extension until March

The industry is to wait for the chancellor's budget in March for further financial support and news on whether the current VAT cut and business rates holiday will be extended.

While the minister for hospitality debate was taking place in Westminster Hall yesterday, the chancellor was also inundated with questions referencing the plight of the sector during his economic update in the main chamber.

Numerous MPs called for the VAT cut and business rates holiday, which are due to finish at the end of March, to be extended to support the industry, including Conservative MP for Stoke-on-Trent Central Jo Gideon, who described the measures as a "lifeline" for the industry.

Chancellor Rishi Sunak said he would "take into consideration" such suggestions and indicated that an update on these decisions will be part of his next budget on 3 March.

He recognised hospitality as "a vital industry for our local communities" that has "borne the brunt of these restrictions and deserves our support".

He added: "As we come out of this it will be important that the hospitality industry is given every opportunity to succeed and flourish… I remain very committed to supporting our fantastic hospitality businesses through this crisis."

Liberal Democrat MP for Oxford West and Abingdon Layla Moran added that the latest one-off grant scheme of up to £9,000 for hospitality businesses will "delay rather than stop them [businesses] from going under"; while several MPs expressed concerns over the speed at which grants are being distributed. Multiple business owners have told The Caterer they are struggling to access Covid support grants through their local councils.

Sunak replied grants "should get to businesses as quickly as possible" and that the cash should be with local authorities "by the end of this week".

Joanne Taylor-Stagg, general manager of the 164-bedroom Athenaeum Hotel & Residences on London's Piccadilly, said: "While it was apparent that the hospitality industry has large support across the aisle, there was no further financial support forthcoming from the chancellor and it seems that this is unlikely to change until March. This is particularly worrying when, as UKHospitality points out, one in five hospitality businesses will not survive to March.

"I hope that the strength in the call for the debate for a minister for hospitality is just the start of our industry standing up for ourselves. Now is the time to be vocal and hold our government to account to support our industry, not because it is one we love, but because it can grow jobs quicker than any other, we can and will help the economy bounce back, but only if we have enough of an industry left to do so."

Danny Pecorelli, managing director of the Exclusive Collection, added that he was pleased the chancellor "got a hard time from MPs asking for specific hospitality support" but added that 3 March "might be too late for many hospitality businesses".

Photo: Flickr / HM Treasury

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