The Tourism Alliance (of which the NCC is a member) recently undertook a survey with UKHospitality, BBPA and ALVA, regarding the rise in VAT on tourism and hospitality.

The results show overwhelmingly that the VAT reduction has been a lifeline to many tourism and hospitality businesses with the funding being spent on keeping the business afloat, complying with COVID requirements and paying staff and suppliers. The key findings are:

• The reduced rate of VAT at 12.5% will be highly important to businesses, with 3 in 4 (77%) stating it is important or crucial
• Businesses will use the reduced VAT rate for an array of purposes, including investing in their businesses and remaining Covid-secure
• Similarly, reduced rates beyond April 2020 would allow continued investment, covid-secure venues and paying of wages to staff
• Reverting the VAT level back to 20% in April 2020 could have serious consequences for businesses, with 4 in 10 saying it would likely lead to cutbacks and job losses
• If VAT on tourism and hospitality were to remain at 12.5% indefinitely, it would increase turnover by an average of 8.8%
• Whereas if VAT on tourism and hospitality were to remain at 12.5% indefinitely, it would increase business investment by an average of 12.0%

See the Powerpoint presentation here.