A cut in VAT to 5% for hospitality and tourism businesses will be extended until March, the chancellor has said.
Rishi Sunak has announced the temporary cut, first introduced in July, will now be in place until well into the new year.
He said: ‘The final step I’m taking today will support two of the most affected sectors, hospitality and tourism.
‘On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13.
‘So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I’m announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year.’
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Businesses who deferred their VAT during the pandemic will no longer have to pay a lump sum at the end of March, the chancellor also announced.
They will have the option of splitting it into smaller, interest free payments over the course of 11 months. This is expected to benefit half a million businesses, according to the Government.
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