Thu 17th Nov 2016 - VAT Campaign writes to MPs to stress VAT reduction benefits VAT Campaign writes to MPs to stress VAT reduction benefits: The VAT Campaign, aiming to reduce the level of VAT in pubs and restaurants, says that the decision to leave the European Union could have a positive effect on its campaign. It has outlined its arguments in a letter to 40 Conservative MPs who have expressed support for the VAT reduction within the hospitality industry. It follows on from briefings sent to MPs on the issue from both the Association of Licensed Multiple Retailers (ALMR) and the British Beer and Pub Association (BBPA). Both the ALMR and BBPA, on behalf of their members, are calling for a reduction in the level of VAT on food and drink served in pubs, restaurants and other outlets within the hospitality industry. The VAT Campaign’s lobbyist Chris Guyver said: “The electorate’s decision could ultimately be very beneficial for our campaign to reduce the level of VAT levied on the sector. Our letter stresses that Brexit has huge, potentially positive implications for the pub, restaurant and hospitality industry. The pub and restaurant industry is a bellwether of economic condition and can be a key engine for growth. Consumer confidence is strongly correlated to the extent people go out to eat and for a drink. If expert prediction is correct and the UK falls into recession, then it would be logical for a new Government to mitigate the effects of a downturn in the sector by using its new tax levying freedoms to reduce the fiscal burden on the hospitality sector. VAT is regulated at EU-level. It is compulsory to have a rate of at least 15% and the vast majority of the details of system are governed via Brussels Directives. The UK can now decide whether to keep VAT and, more importantly perhaps whether to change the system.” ALMR chief executive, Kate Nicholls, said: “A new VAT rate specifically for pubs and restaurants can now be designed in a manner that minimises the initial cost to Treasury while maximising the benefit for pubs and restaurants, putting money back in consumers’ pockets and helping to secure vital jobs and creating many more. There is a tax iniquity compared with other industries, on UK hospitality, which is a key national employment, entrepreneurial, infrastructural and economic driver. The obvious solution would be for the Government to reduce the VAT applying to the sector, bringing tax rates levied on hospitality more into line with other sectors of the economy.” BBPA chief executive, Brigid Simmonds, added: “There is now a real opportunity to tackle unfair VAT rates in the hospitality sector which would be a major benefit to pubs and create thousands of new jobs. It is unfair that if you buy a meal in a supermarket you pay no VAT, but in the pub you do. Even a drop in the VAT rate, to 15% for eating out, would lead to an additional 78,000 jobs. I hope the government makes this a priority.”