Cut VAT for hospitality to boost growth & tackle rising costs- says Norfolk brewer
leisure and hospitality firms are facing increased costs in April when a discount on business rates will be reduced from 75% to 40%
A brewery owner in Norfolk is telling us that cutting VAT for the hospitality sector would help firms manage rising essential prices and boost national economic growth.
Shops, restaurants and pubs in England could face an extra billion pounds in taxes when a business rates discount is cut next month- according to analysis from a national tax firm.
"If others can see the benefits and growth from this, why can't we?"
David Holliday is the owner of Moon Gazer Ales- who are based in Fakenham:
"Although this discount scheme came out of the Covid pandemic, we must not forget that it was designed to boost pubs recovery and change a system which all the political parties have said was unfair and out-dated".
"The incoming German government has announced plans to cut VAT there from 19% to 7%. One of many European countries to do this. If others can see the benefits and growth from this, why can't we?"
The changes in more detail:
Firms in the retail, leisure and hospitality sector are facing increased costs in April when a discount on business rates will be reduced from 75% to 40%.
The changes were announced in last year's autumn Budget, with the Government committing to keeping the discount scheme for the next financial year but cutting the level of relief.
Each business will still have a maximum discount of £110,000.
Ryan's analysis found that the reduced discount will raise an extra £1.03 billion from firms across England over the 2025-2026 tax year.
From April, national insurance contributions will also rise for some businesses, while they will also have to pay employees a higher national living wage.
Alex Probyn, a property tax expert at Ryan, told the PA news agency that it "comes on top of a tsunami of other rising costs, making it a complex and challenging environment" for businesses to operate in.
What's the Government said?
The Government has said extra revenues raised from higher taxes on businesses will help fill a gap in the UK's public finances and be plugged into things like infrastructure and the public sector.
It pledged in the Budget to introduce permanently lower business rates for smaller retail, hospitality and leisure firms from 2026.
The Government has also said that some 865,000 employers will not pay any national insurance in the year ahead because of the employment allowance rising from £5,000 to £10,500.