Save our pubs by extending VAT cut as lockdown eases – Danielle Boxall

What more can be done to help pubs as the lockdown is eased?

THE tables are laid, the glasses are polished, and the beer kegs are piled high. Summer has finally arrived and the long wait for pubs, restaurants, and cafes to reopen is finally over.

Customers may be welcomed back with open doors and open (if distanced) arms – but hospitality’s woes aren’t over. Business owners have been struggling to keep their head above water for over a year, with sometimes thousands spent on new PPE and safety equipment – so they’ll need a lot more than a summer of spendthrift to stay afloat.

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The Government has made some attempt to ease the burden on this struggling sector with the reduced 5 per cent VAT rate introduced last year.

Should VAT relief for pubs be extended?

In his recent Budget, the Chancellor extended the relief to the end of September, when it goes up to a halfway rate of 12.5 per for six months.

The Rt Hon. Member for Richmond’s intentions may be well-meaning, but such a short window doesn’t give firms much respite.

The halfway house rate also comes into force at the worst possible time for the industry. The long lead-up to Christmas was already known for being a dry period before the pandemic struck.

Now with health officials warning of a ‘difficult autumn’ and ‘hard winter’, the picture is even bleaker. After the halcyon days of summer, the industry’s seasonal nature means businesses will be left struggling to make ends meet once again.

After a year of forced closure, hospitality can’t simply be left out to dry.

From country pubs to city cafes, it’s a huge part of our society and culture - uniting us across generations and geography.

Tourism and hospitality supports 140,000 jobs in Yorkshire alone, generating £7.5bn for the local economy. No one knows what the next few years have in store, so there’s no better time to give this struggling sector a respite from tax rises.

To get back in the black, these firms desperately need to make up for lost time.

Extending the Chancellor’s helping hand to spring 2023 would give our favourite places much-needed relief and security, by saving the industry an estimated £13.5bn. Like all tax cuts, it’s not just the recipient that benefits.

The savings mean businesses can plan ahead: if they know their taxes will be lower next year, they can cut prices this summer. If that happened, imagine howour economic recovery would be turbocharged.

If we really want to be bold, the Government should cut taxes further and create one flat VAT level across all products including alcohol (which is currently excluded from the VAT cut).

Reducing the rate to five per cent would save pubs an additional £2.2bn, the same as selling 558,375,634 pints of beer. Now that’s something to raise a glass to.

After five weeks of pints in the pouring rain and windswept weekends, nothing seems better right now than a beer in our pub of choice or a meal in our favourite restaurant.

For this struggling sector, the battles of the past year may be over, but they still need our help. Extending the VAT cut can do just that. Your round, Rishi!

Danielle Boxall is media campaign manager at the TaxPayers’ Alliance.