The UK government is not planning to extend VAT relief measures aimed at supporting the hospitality sector. UK hospitality sector VAT had been cut from 20% to 5% to provide a lifeline to the industry amid Covid-related social distancing.
“The relief comes at a significant cost, and while the government keeps taxes under review, it has no current plans to extend it further,” Treasury Minister Jake Norman said in response to a parliamentary question.
The VAT relief measures had already been extended once and will remain in effect until 31 March 2021.
However, hospitality industry groups had been lobbying for a further VAT relief. Lobbyists call attention in particular to strain on SMEs in the hospitality sector caused by social distancing.
Covid tax relief on the cards?
Chancellor of the Exchequer Rishi Sunak says that further financial support will be forthcoming. Sunak will deliver his budget statement on 3 March.
Sunak told parliament that government “will review all our economic measures in place to support people through coronavirus at the upcoming budget in the first week of March.”
(See this informative guide to managing VAT during the pandemic.)
The Brexit double whammy
UK business is facing more than just a lockdown squeeze.
UK companies that export goods to Europe are facing a host of new administrative costs and VAT challenges. For instance, in many cases, exporters must now settle VAT upfront. That is causing confusion and putting real cash flow pressure on small and medium sized businesses.
At the same time, many businesses that import goods from the EU to the UK are feeling the squeeze of additional charges.
More than ever, businesses need expert advice on how to optimise their VAT compliance.
Make VAT work for you
Optimising VAT compliance is about more than simply meeting your VAT obligations. In difficult times, businesses need to take advantage of all available opportunities, deferments and rebates.
Vatglobal’s expert is working closely with businesses of all sizes to effectively optimise their VAT compliance and overcome global challenges. Get in touch with Vatglobal to get a technology-driven VAT solution for your business.