Tuesday 26 January 2021 3:03 pm

‘No plans’ to extend VAT cut for hospitality, Treasury minister says

Dozens of Tory MPs have written to Rishi Sunak demanding “emergency” funding for councils which they say are facing cash pressures “like never before” amid an election year.

The government has “no plans” to extend the VAT cut for hospitality, tourism and leisure firms, despite industry calls for the tax break to continue while the sector is under coronavirus restrictions.

Rishi Sunak last year reduced VAT for hospitality firms from 20 per cent to five per cent as part of emergency coronavirus measures.

The tax cut is due to end on 31 March, although industry lobbying groups have urged the Chancellor to extend it further while coronavirus restrictions remain in place.

However treasury minister Jake Norman today said the government has “no plans” to extend the cut to VAT for the sectors, despite the uncertainty over reopening.

“The relief comes at a significant cost, and while the government keeps taxes under review, it has no current plans to extend it further,” Norman told MPs.

Pub and restaurant industry bodies have previously said it is “essential” for the sector’s recovery that the VAT cut continues, along with an extension to the business rates holiday.