The hospitality sector has stepped up calls for a permanent reduction in VAT and business rates after suffering a 40% drop in sales over the Christmas period.
Sales figures due to be published today by trade body UKHospitality and industry tracker CGA show that restaurants, pubs and bars recorded a £3bn decline in revenue during December compared to the same month in 2019.
Trading on Christmas Day was down 60% compared with 2019, while sales on New Year’s Eve, one of the most lucrative days in the calendar for night-time venues in particular, fell by 27%.
UKHospitality described the overall figures as “devastating” and said the onset of Omicron meant that businesses had lost a chance to rebuild “crucial cash reserves… delaying the recovery and leaving many businesses exposed going into the fallow winter months”.
It estimates that a prolonged reduction in VAT would cost the Treasury just £213m per year.
Business rate increases were frozen by the Treasury in October until April 2023, with discounts for smaller businesses capped at £110,000.
UKHospitality is calling for the cap to be lifted to £2m.
