Seamus Logan MP has moved a Presentation Bill in the House of Commons on cutting VAT on hospitality. The Bill calls for the UK Government to ‘reduce the rate of value added tax for certain supplies relating to hospitality; and for connected purposes’.
He is urging the UK Government to introduce an immediate and lasting reduction in VAT for Hospitality businesses that are struggling with a series of challenges caused by the cost of living and energy crises and the negative effect of changes to businesses policies at Westminster.
The Aberdeenshire North and Moray East MP has previously highlighted in Parliament the damage being done to local hospitality businesses in his constituency due to high rates of VAT as well as hikes to National Insurance and a lack of government support.
In May, the UK Government introduced the Great British Summer Savings Scheme, with targeted and temporary reductions on VAT on the costs of children’s meals in restaurants, children’s tickets for theatres and cinemas and attractions such as theme parks over the summer holidays. This scheme has been heavily criticised by the hospitality industry as being ‘laughable’, with the sector calling for a more effective and comprehensive cut in VAT from 20% to 10%.
Seamus Logan is also a signatory to Early Day Motion 196 which focuses on the damage done to UK Hospitality as a whole by the UK Government’s decision making on this issue. The UK is an outlier among European countries with a full VAT rate of 20% as compared to the European average of 12.8%, and significantly higher than the 10% rate applied in France, Spain and Italy.
Commenting on his Bill, Seamus Logan MP said:
“My Presentation Bill is an opportunity to focus on the unfairness in the UK’s VAT regime for hospitality businesses that are struggling under the heaviest VAT obligations in Europe.
“During conversations on visits to hospitality businesses in my constituency, it is clear how much they are suffering with the burden of this high VAT rate as well as Labour’s changes to business policies which are clearly going against the government’s stated aim of growing the economy. These policies are scuppering growth, stifling innovation, preventing job creation and workforce expansion while also increasing prices for consumers as businesses need to pass on the huge expense incurred under this unnecessary load.
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“This is about political choices and having the courage to not just promise change but to deliver it where it matters most. Schemes like the Government’s summer cuts have been labelled ‘a joke’ by the sector who are pushing for a far more permanent reduction. As a result, I’m calling on the UK Government to review their VAT policy and cut these rates as soon as possible to help hospitality businesses.
“When the average VAT rates in Europe hover around 12.8% and in some countries as low as 10%, there is surely room for manoeuvre to protect businesses and bring them into line with neighbouring nations. Something must be done at haste to relieve this pressure before more hospitality businesses go under due to a highly uncompetitive system that penalises profitability, ambition, and job prospects.”
