Hospitality bosses have urged ministers to halt a planned VAT rise this spring, claiming a retention could generate £7.7bn additional turnover in the next decade.
Calls for a freeze have been reiterated by the British Beer and Pub Association, UKHospitality, the Tourism Alliance and the Association of Leading Visitor Attractions today.
In a study organised by the groups, retaining VAT at 12.5 per cent instead of a return to 20 per cent, would create some 286,850 jobs over the next decade, it was found.
The study also claimed a freeze would deliver £4.6bn in net present value of fiscal gains to the Treasury over the same period. It would return a positive gain on the government’s investment in less than five years.
One survey cited in the report claims that four in ten businesses anticipate further cutbacks and job losses under current VAT plans. One in ten fear closure.
A spokesperson for the coalition of industry bodies said: “We must now reignite our industry with a long-term approach and vision to our sector recovery.
“The report we publish today sets out the undeniable case for making permanent the 12.5 per cent rate of VAT. The tourism and hospitality sectors can truly act as an engine for the UK’s recovery as we look beyond the pandemic.
“As we approach the point in April where the reduced rate comes to an end, we are united in calling on the government to change course and cancel the planned increase. The economic and societal benefits of making this change would be enormous.”