The Chancellor, Rishi Sunak has announced a cut in VAT - effective from next Wednesday - from 20% to just 5% for food, accommodation and attractions in a move designed to help the struggling hospitality industry. He also announced a £1000 bonus for employers bringing staff back from furlough if they are reemployed up until January next year.
Luke Davis CEO and Founder of IW Capital, discusses the announcements:
"This period has been incredibly challenging for every sector of business and especially the hospitality sector, in which many businesses rely on packed spaces to make the most of custom. Today's announcements will come as a welcome boost to the sector as they encourage people and customers who are very conscious of their finances to get back into pubs and restaurants. Innovation will be needed to make new restrictions work for businesses and customers, but this is something that UK SMEs have in spades.
Now, with this added support from the Government and as private finance providers, could be a fantastic opportunity to support businesses in this sector at a time when they need it most and with the biggest opportunity for growth. When lockdown and social distancing restrictions are eventually fully lifted this period could lead to a new age of innovation and improved customer experience in hospitality, making it an exciting sector to be a part of.
The job retention bonus will undoubtedly help small firms to retain staff. No leader of a small business wanted, or now wants, to make staff redundant, for the majority of those employed in the UK - by the SMEs - leaders are doing everything in their power to keep on staff. We hope this help will allow firms to keep staff on and then think once more about their ambitions in terms of growth and job creation.”