Huge majority back move to keep hospitality VAT at 12.5 per cent

The British public is overwhelmingly in support of the temporary 12.5 per cent rate of VAT for hospitality being retained.

According to a new poll, nearly 80 per cent are in favour, but the Government seems determined that the rate will return to 20 per cent next month.

Nearly three-quarters (72 per cent) of the public think the Government has a responsibility to ensure that hospitality businesses recover from the impact of the coronavirus pandemic.

The survey by YouGov and commissioned by UKHospitality found:

The last two items alone present challenges to the industry, but reverting to 20 per cent presents the dilemma of whether to absorb or pass on the increase to customers combined with an increase in the minimum wage and continuing staff shortages.

Hiring and retaining key staff is vital, so businesses will need to look at their costs and how to potentially make savings.

How could businesses mitigate the challenges?

Other ways of dealing with the challenges could include improving the environment to make dining a more pleasant experience, offering a warm welcome and being attentive to customer needs.

Other ways to improve the experience could include:

The representative study of 1,743 UK adults by YouGov was carried out in February.

UKHospitality CEO Kate Nicholls said: “This research shows that our guests are feeling the pinch and that is hugely concerning for an industry and its workforce that are reliant on discretionary spending.  Extending the existing VAT rate of 12.5 per cent will help hospitality operators to hold down their prices, secure jobs and will help keep a lid on inflation.”

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