Cut alcohol taxes to aid hospitality industry – Danielle Boxall
Although it may look like we’re back to relative normality, this does not apply to large parts of the hospitality industry.
Over a year’s worth of coronavirus restrictions have left businesses facing a mountain of debt that they’re now expected to start paying off.
The sector is already facing staff shortages, leaving venues with no other options but to reduce opening hours or pause service completely.
The pressure of the pandemic is still looming large.
The staycation boom has no doubt boosted the takings of pubs, with recent ONS stats showing a dramatic 87.8 per cent increase in output from April to June.
But with only 14 per cent of pubs and bars, and only 15 per cent of restaurants having “high” confidence they will survive the next three months, it’s undeniable that there’s a long way to go.
Firms need a couple of years of booming trade before their finances will fully recover.
So if Britain’s bars, cafes, pubs, and restaurants are to survive, the Chancellor needs to step up his support.
The current VAT cut on food and soft drinks is exactly the helping hand hospitality needs.
But it’s being snatched away at the end of next month, just as the sun sets on the summer rush and venues begin to worry about the possibility of another difficult winter.
We all need the tax relief to run a little bit longer until businesses are firmly back on their feet.
This is why we’re calling for an extension of the cut and for it to include alcohol – and we’re not alone in our demands.
From pub chains like JD Wetherspoon and Punch Taverns to sector experts like the British Beer & Pub and the Night Time Industries Associations, a raft of industry leaders have backed our calls.
As with all tax cuts, the knock-on effects of the VAT reduction are huge.
Britons have become used to supermarket prices, so landlords need a break to tempt their customers back.
Firms like Nandos, Pret and Wetherspoon have all cut prices to compete, saving households £160 a year on average. Imagine the impact adding alcohol to the cut would have.
This year, when families are swapping Spanish seasides for Scarborough and Disney World for the Dales, is the time to show holidaymakers they don’t have to go abroad when the pandemic’s over.
And with tourism and hospitality supporting 140,000 jobs in Yorkshire alone, the industry can use tax breaks like this to go from strength to strength.
Not only would it bolster foodie hotspots like York and Malton, but everything in between, from Whitby’s famous fish and chips to Black Sheep’s delicious beers.
But it doesn’t stop at VAT. With punters paying one third of the price of a pint in tax, ending the current freeze on alcohol duty would cause carnage in the sector.
Beer duty in the UK is over 13 times higher than in Germany, Spain, Luxembourg, Romania and Bulgaria. So if we want to compete with the continent when it comes to tourism, HM Treasury must reform our outdated alcohol duties too.
The battles of the past year may be over, but British businesses, diners and drinkers still need our support after this summer. Extending the VAT cut is exactly that.
So come on Rishi Sunak – let’s fix the roof while the sun is shining.
Danielle Boxall is media campaign manager at the TaxPayers’ Alliance.
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