Reduce the standard rate of VAT applied to hospitality businesses (including restaurants, cafés, pubs and accommodation) from 20% to 13% on a permanent basis, to reflect the sector’s cost structure and to support business viability following recent fiscal changes.

The Autumn Budget increased cost pressures on hospitality through higher employer National Insurance contributions and changes to business rates relief. The removal of the Covid-era 40% rates discount, combined with revaluations, has in our view materially increased fixed costs. A targeted VAT reduction could directly improve cash flow, protect employment, and reduce closures across high streets, including businesses excluded from current pub-only reliefs.