| answer text |
<p>The temporary reduced rate of VAT was introduced on 15 July 2020 to support the
cash flow and viability of around 150,000 businesses and protect over 2.4 million
jobs in the hospitality and tourism sectors. As announced at Spring Budget 2021, the
Government has extended the temporary reduced 5 per cent rate of VAT for the tourism
and hospitality sectors. This relief ended on 30 September 2021. On 1 October 2021,
a new reduced rate of 12.5 per cent was introduced to help ease affected businesses
back to the standard rate. This new rate will end on 31 March 2022.</p><p> </p><p>This
relief has previously been costed at over £7 billion, but the latest forecast means
it may now cost over £8 billion. Whilst all taxes are kept under review, there are
no plans to extend this relief. The Government has been clear that this relief is
a temporary measure designed to support the sectors that have been severely affected
by COVID-19. It is appropriate that as restrictions are lifted and demand for goods
and services in these sectors increases, the temporary tax reliefs are first reduced
and then removed to rebuild and strengthen the public finances.</p>
|
|
