Booze misses out on VAT cut, but pubs say glass is half-full
Britain’s largest pub body has shaken off Rishi Sunak’s decision to not cut VAT on alcohol in his economic summer statement and instead largely praised the mini-Budget.
The British Beer and Pub Association (BPPA) said the exemption would provide little help for “those pubs where revenue is more drinks led”, but that most of its members welcomed the package of measures.
The chancellor announced a six-month cut in VAT on hospitality and tourism businesses from 20 per cent to 5 per cent in his statement today.
The hospitality sector will also benefit from government vouchers on Mondays, Tuesdays and Wednesdays that will allow people to get 50 per cent of meals, up to £10 per person, at eat-in establishments.
However, alcohol was exempt from both of these measures aimed at stoking demand within the ailing sector as the UK reopens from lockdown.
BPPA chief executive Emma McClarkin said: “The positive measures announced today are a welcome first step on what we believe will be a long road to full recovery for our sector.
“Of course, for those pubs that do serve significant amounts of food or offer rooms to stay in, the cut to VAT for these to 5 per cent will be a welcome boost.
“Whilst the measures announced today will help food led pubs, those who just serve beer may feel they are left wanting.”
City A.M. understands that the Treasury did not include alcohol in the offering as up to 90 per cent of pubs offer food at their venues.
Sunak said in his speech that the emergency measures for pubs and restaurants across the country would act as a “£4bn catalyst” that will benefit over 150,000 businesses and consumers and help protect 2.4m jobs.
He added: “We need to give these businesses the confidence to know if they open up…demand will be there and be there quickly.”