The government is being urged to extend its 5% VAT rate cut on children’s meals in restaurants this summer to the wider hospitality sector.
The call follows an announcement that VAT will be temporarily reduced to 5% on children’s meals as well as family admissions to visitor attractions and children’s soft play venues from 25th June to 1st September. It is hoped it will help more families access summer activities while reducing pressure on household budgets.
The reduced rate applies in England, Wales, Scotland and Northern Ireland, with children’s meals defined as meals served by a restaurant, café or similar establishment for consumption on the premises, from a children’s menu and marketed, presented and priced as children’s meals.
Calling it a “bold step”, UKHospitality, which has long campaigned for a cut to VAT for the entire hospitality sector, said the move was recognition from the government that a lower rate of VAT delivers immediate benefits for consumers, businesses and the economy.
It said the VAT cut was a ‘positive step’ for families, but urged the government to go further. Kate Nicholls, chair of UKHospitality, said: “It’s good to see the government recognise the importance of a lower rate of VAT for hospitality as the quickest and simplest way to lower prices and boost consumer confidence.
“A 5% rate of VAT for family admissions to visitor attractions, children’s meals and soft play is a positive step to help families enjoy a great British break this summer.
“If there is scope to further support families by including accommodation in this reduced rate, I would encourage the chancellor to do so to help tackle one of the biggest costs of a family holiday.
“This should now be viewed by government as a downpayment on a wider shift to a lower VAT rate for the entire hospitality sector, to bring us in line with Europe. Our biggest competitors benefit from VAT rates that average around 10%, and can be as low as 7%, and the UK is a clear outlier.
“As the government has recognised today, VAT is the single biggest lever it can pull to lower prices, tackle inflation, drive demand, boost spending, generate growth and create new jobs. I would urge it to be bold and cut VAT for the entire hospitality sector.”
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