VAT cut a ‘shot in arm’ for tourism
The newly announced cut in VAT rates for the hospitality and tourism sector has been described as a“massive shot in the arm”for the industry across Perth and Kinross.
Chancellor Rishi Sunak is cutting the rate of value added tax (VAT) on hospitality and tourism from 20 per cent to five per cent from July 15, 2020 to January 12, 2021.
Around 18,300 jobs are dependent on the Perth and Kinross hospitality and tourism sector - around 23 per cent of the total workforce in the region - as it prepares to reopen in Scotland next week.
Stephen Leckie, the chief executive of Crieff Hydro Hotel, has welcomed the reduction but says the industry is not out of the woods yet.
“The VAT reduction is welcome - it is a good shot in the arm”, he said.
“The drop to five per cent VAT gives many businesses a chance to survive.
“The challenge now is that there is no single grand shot solution as the tourism industry is still in deep trouble.
“We are reopening on Wednesday, which is great, but we are still dealing with nine months’ worth of losses.
“We will still lose money through July and August but Crieff Hydro will still be here next year.
“Bigger businesses have not had any grants from the government but the drop in VAT will help marry the deficit.”
Perth and North Perthshire MP Pete Wishart said: “I am pleased to see that the chancellor finally gave in to demands to cut VAT for the hospitality and tourism sector.
“This is something that my colleagues and I have been calling on for quite some time and I know from my regular contact with those in the industry that it will be very welcome.”
Mid Scotland and Fife MSP Alexander Stewart said: “The tourism and hospitality sector is critically important for the economy across the whole of Perth and Kinross and this bold move of a significant VAT cut from the chancellor is another major show of support from the UK Government for Scotland’s economy.
“This VAT cut to just five per cent is a massive shot in the arm for the hospitality sector and will encourage greater spending power.”