Retail industry calls for VAT cut to be extended to struggling sector
Retail industry experts have expressed shock and disappointment that the chancellor’s decision to cut VAT for hospitality firms did not extend to the struggling sector.
Rishi Sunak today announced plans to slash VAT for hospitality and tourism businesses from 20 per cent to five per cent.
The retail sector welcomed the support announced for employment and training, but urged the government to reconsider its decision not to extend the tax break to shops.
The UK high street, which was already struggling before the coronavirus crisis, was faced with a major hurdle in March after all non-essential stores were ordered to close during the lockdown.
While stores have since been allowed to reopen, retailers are grappling with new social distancing measures and nervous consumers.
British Retail Consortium chief executive Helen Dickinson said: “The chancellor’s proposals of a VAT cut will be important in reviving these sectors, and the 1.8m people who work there.
“However, it was disappointing that the chancellor did not extend this measure to the retail industry and the three million people it employs. It was a missed opportunity and we hope that the Government will reconsider this ahead of the Autumn Budget.”
Paddy Lillis, general secretary of retail workers union Usdaw, said: “We listened carefully to the chancellor’s statement today and we are truly shocked that he made no mention of the huge challenges the retail industry faces.
“We recognise the value of a VAT cut for the hospitality sectors, which should have been extended to retail.”
He added: “We needed to hear today that the government will adopt an urgent retail recovery plan.”
Viviene King, chief executive at shopping centre body Revo, said the cut for hospitality businesses could boost consumer spending in general and encourage footfall at retail and leisure hubs.
However, King added that more support for retailers struggling with rents and business rates is needed in order to protect jobs.
“Without this, our fear is that 3m retail jobs, many held by young people, are in jeopardy, and future generations could be denied the vital first step on the employment ladder if there is not more support for town centre regeneration,” she said.