SLTA response to the Chancellor’s Summer Statement.
The Scottish Licensed Trade Association (SLTA) has welcomed Chancellor Rishi Sunak’s decision to cut VAT on food, accommodation and attractions from 20% to 5%, from next Wednesday until January 12.
It also welcomes the UK Government’s announcement that everyone can get 50% off meals in participating restaurants across the UK during August, with the discount up to a maximum of £10 for adults and children applying from Monday to Wednesday. The scheme, called “Eat Out to Help Out”, will go some way to helping the hospitality sector get back on its feet, said the SLTA.
Hospitality was one of the first industries to close and is one of the last to reopen. SLTA managing director Colin Wilkinson said:
“July 15 will be the kick-start for the majority of the industry in Scotland but we must remember it is estimated that nearly one-third of premises will either not be able to open at all or will not be viable even if they can open.
“While we particularly welcome the reduction in VAT from 20% to 5% – something we have been lobbying for – and agree that much of the Chancellor’s rescue package for the UK economy is good news, from the hospitality sector’s perspective Rishi Sunak needed to do more to help rebuild the industry.
“However, this substantial but temporary reduction in VAT for accommodation and food gives the sector a much-need boost,” he continued. “Experience from Ireland shows that when VAT rates are lowered tax revenue to the Government increases, and research undertaken in the UK indicates this would be reciprocated.
“Extending the commercial rates holiday would have also been a huge relief for the industry and again sector-specific support should have been introduced to assist those in most need.
“The entire industry needs ongoing support for many months, stretching to years if it is to recover to anything like the level it was prior to Covid-19.”
Mr Wilkinson said the Chancellor’s job retention bonus plan to keep furloughed workers in their jobs when the scheme ends in October will benefit the hospitality and tourism industry. But he added: “Overall business costs needed to be further reduced to not only protect the future of Scotland’s pubs and bars, but also the 60,000 jobs these businesses provide.”
To view a copy of the Chancellor’s speech click here