York & North Yorkshire Chamber of Commerce is calling for the rate of VAT to be reduced for businesses in the hospitality sector.

With the sector entering its quietest period of trading and after nearly four years of enormous disruption and cost pressures, hospitality businesses have never faced so many challenges.

Accordingly, the Chamber’s Hospitality Forum is calling for the rate of VAT firms in the sector pay to be cut to five per cent, as it was during the aftermath of the pandemic.

VAT has been temporarily reduced from 20 per cent to five per cent for those enterprises in the hospitality, hotel and leisure industries but was restored to its current rate of 20 per cent in March of last year.

Andrew Pericleous, chair of the Hospitality Forum, said: “The Forum believes that conditions are sufficiently serious to warrant a reintroduction of the reduced rate.

“Data in British Chamber of Commerce’s most recent Quarterly Economic Survey showed the hospitality sector to be effectively in recession. The vast majority of firms in our sector are struggling with labour shortages and the twin pressures of inflation and interest rates continue to make life incredibly challenging.

“Reducing the rate of VAT that firms in the sector pay would help provide some much-needed breathing room as we enter our quietest period of the year.”

The Chamber’s latest QES showed that more than four in five hospitality firms were struggling to recruit staff while three quarters of businesses in the sectors were struggling with the cost of wages and utilities.