Tourism & Business news

Hospitality sector welcomes VAT cut & eating out scheme

Janice Gault, chief executive, NI Hotels Federation.

The introduction of reduced VAT on food, accommodation and attractions from 20% to 5%, and an incentive scheme to boost eating out in August, have been welcomed by the hospitality and tourism sectors.

Chancellor Rishi Sunak announced the new measures on July 8 to help the beleaguered sectors get back on their feet as Covid-19 restrictions are relaxed.

“This comes at a time when many in the hospitality sector are fearful for their future, but this will help paint a brighter picture and give businesses a fighting chance to survive and save jobs,” said Colin Neill, chief executive, Hospitality Ulster. “As businesses face the reality of operating at a reduced capacity for some time to come, ongoing government support is going to be crucial on the long and hard road to recovery.

“The announcement of an Eat Out to Help Out scheme which will give customers 50% off meals up to a cap of £10 per person in August is significant. We need to encourage people to visit our excellent venues once again and this will hopefully help in this regard.

“Even before the Coronavirus pandemic, it was clear the hospitality sector was at a competitive disadvantage in terms of VAT. Sharing a land border with the Republic of Ireland which has a 13.5% VAT rate made it extremely difficult to compete. As we look to rebuild the sector, the Chancellor must look at permanently reducing the UK’s 20% hospitality and tourism VAT rate which is one of the highest in Europe if we are to sustain the sector in the long term.”

Janice Gault, CEO, Northern Ireland Hotels Federation, said: “This is a real game changer for the industry and will increase our chances of survival.

“Having campaigned for more than a decade, the news of a cut in VAT on food, accommodation and attractions from 20% to 5% until 12 January is a tremendous result for the sector, under the chancellor’s plans to kickstart the economy.

“It will allow us as an industry to compete on an all island basis and it also helps hoteliers address a number of challenges as they return to trading.

“Other measures including funding for eating out in the form of an Eat Out to Help Out discount, in addition to further furlough support and subventions for employees are a recognition of the sector as an economic driver and a job rich sector.

“Throughout the crisis the Chancellor has trod a brave path showing ingenuity and creativity in his support mechanisms.

“Hoteliers have opened with a willingness to trade and have shown their commitment to the local economy in doing so. This latest development will create a sustained positive impression on the economy and shows that the hospitality sector is positioned as an engine for growth.”

John McGrillen, chief executive, Tourism NI, said: “Today’s announcements by the Chancellor will provide a great boost for tourism and hospitality businesses across Northern Ireland. The reduction in VAT from 20% to 5% for six months will give a lifeline to businesses as they re-open and continue to trade in very challenging circumstances.

“The Eat Out to Help Out scheme is also a very welcome intervention for the hospitality sector which contributes so much to the visitor experience. Taken together these measures will help to stimulate demand, encourage more people to take a break at home this summer and save local jobs.”

Howard Hastings, managing director of Hastings Hotels, said: “These measures will go a long way in helping the local economy recover in the coming weeks and months ahead and will hopefully encourage more people to visit restaurants and book a staycation this summer.

“We hope this will also give an extra incentive to visitors from the Republic of Ireland and the UK to book a visit to Northern Ireland this summer as it certainly adds extra value to what we already offer. With the increased demand we hope these measures will generate, we will now re-open the Europa Hotel for accommodation earlier than planned on Saturday 1st August.”

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