Hospitality Sector Urges Permanent VAT Cut Beyond Summer Scheme

Temporary Relief, Lasting Need

As the Great British Summer Savings initiative comes to a close, hospitality businesses across Cornwall and Devon are voicing their support for a permanent reduction in VAT rates. The government's £300 million scheme, which temporarily slashed VAT from 20% to 5% on family attractions, children's meals, and cinema tickets, was designed to ease the financial burden on families during the summer holidays.

While the initiative provided some relief, it also highlighted the need for long-term solutions that can support businesses year-round. Many operators have expressed concern that without continued assistance, they may struggle to remain viable through the winter months.

A Mixed Reception

The temporary VAT reduction did bring about a noticeable uptick in footfall for some attractions, but not all. Keith Southwell, managing director of Lappa Valley Railway, noted that despite promotional efforts, many customers weren't aware of the scheme's existence.

"It hadn't made any difference whatsoever to my business," Southwell said, adding that many customers were benefiting without even realizing it.

Similarly, Pete Fraser from Harbour Lights fish and chip restaurant in Falmouth described the policy as a "gimmick" once the summer was over. "We roll off into the winter and the fun starts trying to balance the books," he noted, emphasizing that businesses need consistent support throughout the year.

Business Impact

For some enterprises, such as Tara Stapley's Big Sheep Farm and Theme Park in Bideford, the scheme did offer tangible benefits. "Numbers have increased slightly and I think that is partly down to the summer savings scheme," Stapley said.

Stapley also mentioned that the business had reduced ticket prices and added more children's meals to their menu, which helped attract families. She emphasized that publicizing the scheme more effectively could have further enhanced its impact.

"We want to make that as affordable as possible and memories that last a lifetime for them," Stapley said. "Anything that the government can do in extending the scheme would be a huge help not only for us but the people who want to visit our site as well."

Broader Industry Concerns

The hospitality sector, particularly in areas like Cornwall and Devon, has long struggled with the high cost of VAT. According to Allen Simpson, CEO of UK Hospitality, the policy helped families spend more on leisure activities, but he believes the government should consider a broader, permanent solution.

"Hopefully that's a lesson that the government can take forward into the coming months," Simpson remarked.

Advocacy for Extension

Visit Devon's director Sally Everton echoed these sentiments, suggesting that the scheme should have continued until November to cover the autumn half term and pre-schoolers who travel after the main summer break. She noted that while some venues found it logistically challenging, others were eager to participate.

"The VAT is a killer to so many businesses," Everton stated. "In an ideal world a reduced VAT across a broader hospitality sector and permanently would be the ideal situation."

Government Response

A Treasury spokesperson defended the current initiative, noting that it has been beneficial for both families and local economies in the South West. The spokesperson also highlighted other measures such as a 20% reduction in business rates for pubs, social clubs, and live music venues.

"Our Great British Summer Savings has benefitted businesses and families from across the South West," the spokesperson said. "The scheme is increasing footfall for businesses over the summer, getting more people through the door and boosting local economies."

The Way Forward

Despite the government's assurances, industry leaders are pushing for a permanent solution that addresses the ongoing challenges faced by the hospitality sector. With winter approaching, businesses are eager to see long-term policy changes that can ensure their survival and growth.

The calls for a sustained VAT reduction are not just about short-term relief—they represent a fundamental need for stability in an industry that has weathered numerous economic storms. As we move forward, it's clear that the hospitality sector will continue to advocate for policies that provide lasting support.