Key Topics

Campaigns / Economy

VAT

Hospitality in the UK pays the second highest VAT in Europe

Lowering the rate of VAT is the single most important thing the Government could do to support hospitality.

The UK has one of the highest rates of VAT for hospitality in Europe and a lower rate of VAT is one of our key policy asks of Government. We continue to push this at every opportunity.

We saw the impact a lower rate of VAT for hospitality had when it was introduced during the pandemic – stimulating demand and generating revenue.

The current rate is a significant drag on our competitiveness on the world stage.

Sign the petition

Do you want to back your favourite venue, help your high street and support local jobs? Then sign our petition to lower the rate of VAT for hospitality to 10%.

Our pubs, restaurants, cafes, hotels, nightclubs and many more, are at the heart of our communities.

They bring people together and bring life to our cities, towns and villages, but they’re under huge pressure from rising costs.

In the UK, you pay one of the highest VAT rates in Europe. 20% extra in VAT for your pint, meal out or stay away. In France, Spain and Italy, it’s 10%. In Germany? 7%.

Our message to Government is simple. Let’s stand together to say VAT at 10% is fair for hospitality.

#VATsTheProblem

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Everyone benefits from lower VAT

Make the case to your MP.

If you want to make the case to your local politician then this handy summary gives you the key arguments.

A lower rate of VAT for hospitality benefits all aspects of society and the economy.

We’re currently working with academics at Bournemouth University to produce further research on the advantages of a reduced rate of VAT.

  1. 1

    Keep prices down

    A lower rate of VAT will allow hospitality businesses to keep prices more affordable for the public.

    This will save them money when they eat or drink out, visit an attraction or book a break.

    A thriving hospitality industry creates competition which keeps prices affordable in the long term.

  2. 2

    Greater choice on the high street

    With a lower rate of VAT, businesses can have confidence to invest and grow, opening new venues and providing different and diverse hospitality experiences for the public to enjoy.

  3. 3

    Supports jobs

    A lower rate of VAT for hospitality would be the single biggest financial help for the sector, during the cost of doing business crisis.

    It would also provide the boost that could keep many in business and allow them to support and grow the 3.5 million jobs already in hospitality.

The UK has one of the highest rates of VAT in Europe.

Europe's average VAT bill is 12.8%. In the UK it's 20%.

It puts our sector at a disadvantage and makes it harder for people to support local businesses. We need to see a lower rate of VAT.

Average VAT rate across Europe

Backed by the public

A lower rate of VAT is overwhelmingly backed by the public.

A study by YouGov, commissioned by UKHospitality, found that 79% of the public were in favour of a reduced rate of VAT for hospitality and tourism. Just 17% backed VAT being set at current levels of 20%.

Backed by MPs

An influential group of MPs recommended that VAT for hospitality and tourism be set at 12.5%.

Prior to the rate of VAT returning to 20%, reverting back to pre-pandemic levels, the All-Party Parliamentary Group (APPG) for Hospitality and Tourism backed our calls and said that a lower rate of VAT would bring benefits including jobs international competitiveness and social wellbeing.

The APPG found that a lower rate of VAT would:

  1. 1

    Support the viability of businesses

  2. 2

    Improve the rate of employment

  3. 3

    Positive impact on Treasury revenue

  4. 4

    Support regional growth

  5. 5

    Improve international competitiveness

  6. 6

    Ease cost of living pressure

  7. 7

    Improve social wellbeing

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