I am collecting support from hospitality businesses across South Shropshire for my petition to cut VAT on food and hot beverages to 12.5%
Now that the government's tax hikes have come into effect, my campaign to support local hospitality is more important than ever. This summer, venues will be starting to feel the pinch of the higher contributions that will harm their profits and cost local jobs.
The hospitality sector is largely made up of SMEs and supports 3.5 million jobs, while contributing £93 billion to the UK economy. This includes 166 local pubs and 4 breweries in South Shropshire. supporting 2,040 jobs and adding £63 million to the economy.
UKHospitality warns that the sector will incur an extra £1 billion of costs for 774,000 of its workers from April. As of that time, more businesses in the sector will become eligible for employer's National Insurance Contributions (NICs). The change was announced by the Chancellor as part of the Autumn Budget. She said that the threshold at which employers start paying NICs will be reduced from £9,100 to £5,000-a-year. In November, over 200 hospitality businesses warned that these changes will force some businesses to close - while others will have to drastically reduce their headcount and scrap plans to invest in renovations.
As reported by the Guardian in December, the number of pubs in England and Wales has fallen below 39,000 for first time. To reverse this trend, cutting the rate of VAT on food and hot beverages sold in their venues would be a huge boost to the sector. After meeting with representatives of the sector in Ludlow, I launched my initial campaign for VAT to be reduced in December 2024. More than 25 businesses from the area signed the petition.
I have now written to more than 160 pubs, bars, and restaurants across South Shropshire to enlist their support for this campaign. Together, they support around 700 local jobs. In my letter to I said:
"Our hospitality businesses in South Shropshire are hugely valued community assets. You not only support local economies but provide valuable spaces for communities and generations to come together."
When VAT was previously cut between October 2021 and March 2022, as reported by Hospitality UK, 54% of businesses passed on the reduced rate of VAT in the form of lower prices for their consumers. Notably, more than 85% of pubs serve food. UK Hospitality has estimated that a VAT cut could create 21,971 jobs across the West Midlands over a ten-year period - with additional turnover of £544 million. Importantly, the sector created one in seven new jobs between March 2009 and March 2020, which amounts to 542,000 jobs.
If you are a hospitality business in South Shropshire, please sign my petition below.
