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COVID-19 Update 30th September 2021

VAT Increase Press Release

With the increase in VAT for accommodation, attractions and restaurants increasing from 5% to 12.5% tomorrow we have been produced the attached press release with UKHospitality, BBPA, AVLA and BII based on the results of the VAT Survey that we sent around a few weeks ago. Some of the main findings from the survey were:

    • The reduced rate of VAT has been highly important to businesses, with 8 in 10 (77%) stating it is important/very important/crucial
    • Businesses will use the reduced VAT rate for an array of productive purposes, including 6 in 10 who will invest in their businesses, half who will use it to meet costs of complying with Covid-secure guidance, and over 1 in 3 who will use it to pay staff or suppliers/creditors
    • Similarly, if the reduced rate were to continue to apply beyond April 2022, the saved costs would be used for a series of productive purposes, particularly with 7 in 10 who will invest further in their businesses
    • Reverting the VAT level back to 20% in April 2020 could have serious consequences for businesses, with 4 in 10 saying it would likely lead to cutbacks and job losses (up to a fifth of the workforce), with a further 1 in 10 saying it would lead to major cut backs and job losses
    • If VAT on tourism and hospitality were to remain at 12.5% indefinitely, it would increase turnover by an average of 8.8% (using mid-point average calculation)
    • If VAT on tourism and hospitality were to remain at 12.5% indefinitely, it would increase business investment by an average of 12.0% (using mid-point average calculation)

The results of the modelling work that we are undertaking are currently being finalised and we should be able to share this report with you shortly.

Finally it is worth pointing out that the increase in the VAT is based on the invoice date rather than the payment date or the date the goods and services are used  – so if business are able to invoice sales to customers with today’s date, they should do so.


Principles For Sustainable Resumption Of International Travel  

The transport Secretary hosted a meeting of G7 ministers to agreed a series of measures to align international travel strategies, through 7 principles that are aimed at setting global standards on international travel and generate a sustainable recovery for the international travel sector. There principles are:

    • futureproofing the transportation sector against future health threats
    • ensuring the fair treatment and safety of essential transport personnel
    • respecting privacy and data protection in implementing vaccination certification solutions
    • reaffirming the pre-eminence of scientific evidence in planning international travel policy
    • ensuring fairness and equity in respective national responses
    • maintaining regular international and multilateral engagement
    • delivering a safe, sustainable and resilient recovery
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