UK Chancellor announces VAT cut for hospitality sector

On 8th July, the UK Chancellor Rishi Sunak announced a cut in VAT from 20% to 5% for hospitality, tourism and accommodation services. This cut is effective from Wednesday 15th July.

The announcement applies to hotel, pubs, restaurants, cafes, zoos and cinemas. It covers food, accommodation and attractions, but will not apply to alcohol. An unprecedented ‘Eat out to help out’ scheme will give people a 50% discount on eating in restaurants and cafes, from Monday to Wednesday throughout August.

The measures are intended to provide a boost for the hospitality and leisure industries which have been hit hard by the coronavirus pandemic.

Projected to remain in place until next January, the scheme will cost the Treasury £4bn.

Sunak said:

“This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses, and consumers everywhere – all helping to protect 2.4 million jobs […]

People need to know that although hardship lies ahead, no one will be left without hope.”


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