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<p>The temporary reduced rate of VAT was introduced on 15 July to support the cash
flow and viability of about 150,000 businesses and to protect over 2.4 million jobs
in the hospitality and tourism sectors. As announced at Budget, this relief will now
run until 31 March 2022, with a staggered return to the standard rate. Applying this
relief permanently would come at a significant cost to the Exchequer, and that cost
would have to be balanced by increased taxes elsewhere, or reductions in Government
spending.</p><p> </p>
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