VAT Reduction for the hospitality sector – are we going the right way?

24 July 2015 - 15:06pm

Since the 2008 downturn many industries have felt the pinch in turnovers and profit margins. For those in the hospitality industry; the knock-on effect has led to reduced numbers in many restaurants, pubs dropping like flies and many high street restaurants and retailers offering discounts or 2-for-1 deals just to increase footfall.

Then in January 2011 the Government increased VAT to 20%. With so little business to build on many hospitality companies began to struggle. That August, French and Irish hospitality businesses received VAT reductions, stimulating a call to arms for similar action in the UK. Launched by Big Hospitality’s sister company; The Publican’s Morning Advertiser, a petition went out asking for the subject to be raised in the House of Commons. We have seen the likes of Punch Taverns, TGI Fridays and, the latest big name, Prezzo, all join in the call for reductions.

Over a year later and it appears we are not much closer to a decision. I know where I stand, but where are you in this debate? Should we be offering the industry an easy way out, to continue to trading as they have in the past and give them some slack, or should we rather be encouraging the players in the industry to diversify their offerings, think outside the box and raise the bar on quality and give customers value-for-money that they so richly deserve?

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