Issue 103
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“Catastrophic” Prices Rises for Customers as Hospitality VAT Returns to 20%
In A Sector Facing Soaring Costs and Plummeting Consumer Confidence, Today’s Increase in VAT Gives Operators No Choice But to Pass on Price Rises, UKHospitality Warns
VAT in hospitality rises from 12.5% to 20% today (1st April 2022), at the same time as the sector is forecasting cost inflation running at 18%. The situation will result in double-digit price increases for consumers as operators struggle to survive, industry body UKHospitality says. Recent business surveys show the industry is facing a 95% hike in energy bills,
19% in labour costs, and a 17% and 14% rise in food and drink prices, respectively. It is thought these pressures have worsened considerably in the last two weeks. Keeping VAT at 12.5% would have supported operators trying to absorb this tidal wave of cost increases, which come as consumers face their own cost of living crisis.
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