Treasury defends VAT for hospitality amid cross-party pressure
During a Westminster Hall debate on 12 November, James Murray acknowledged a VAT cut would help hospitality but warned of the cost to public finances. HMRC estimated that cutting VAT on accommodation and on food and drink from 20% to 10% would cost about £11bn a year; 15% would cost £5bn and 12.5% £8bn. Murray said any benefits would only partly offset the price tag and affordability must be considered. He offered no commitment to a VAT reduction. Labour MPs pressed for options. Tonia Antoniazzi, chair of the Northern Ireland Affairs Committee and the All-Party Beer Group, urged a four-year pilot in Northern Ireland reducing VAT to 10% on food and on accommodation to narrow the cross-border competitiveness gap with Ireland. Brian Leishman warned independent pubs struggle against larger operators. Dr Simon Opher backed targeted relief for smaller hospitality businesses, arguing a universal cut could favour major chains. In response, Murray reiterated the Government's commitment to business rates relief, including a 20% reduction for pubs from April 2027 and a two-year real-terms freeze for retail, hospitality and leisure properties in England. Changes to small business rates relief thresholds are expected to remove about 70,000 additional businesses from paying rates. No further commitment to reducing hospitality VAT was announced. Source: The Morning Advertiser
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