UK Hospitality Sector Seeks Urgent Support from Government

July 20

As the hospitality sector reels under the aftermath of COVID-19 pandemic, the UK hospitality sector is seeking urgent support from its Government to revive the sector. More than 120 bosses of the hospitality field have signed an open letter urging the UK Prime Minister Boris Johnson to provide financial aid and investment in the sector to prevent “widespread devastation”.

The BBC has reported that industry wants the PM to introduce policies to reduce VAT and also defer tax bills till some stability is achieved. It has also said to cover the workspace rent expenses through various financial grants and relief.

The signatories to the open letter have warned that some sectors of the economy will remain closed until further notice and if these sectors are not saved then it will turn into a disaster for the hotel’s business. These sectors of the economy are the leisure and late night ones which will not function due to the current strict guidelines and are on the verge of going out of business.

The government has been urged to create a ‘fightback fund’ worth GBP 1.7 billion to prevent businesses from going bankrupt due the negative effects of the lockdown. The letter has urged the ministers to focus more on the parts of the hospitality sector like hotels and cafés that are struggling to cope up with the sudden changes and provide more financial aid for the same.

However, the Treasury has something otherwise to say as it has stated that its Chancellor Rishi Sunak has announced business rate holidays keeping in mind the struggling sectors like retail, hospitality and leisure sectors. Also, it even claims to have protected 9.2 million jobs through its job retention scheme.

The trade group UK Hospitality has also said that it has the capacity to return in full swing and operate successfully post lockdown as well; however, the Government needs to extend a helping hand to aid them in this.

The following are some of the recommendations that the open letter suggests to the Government:

- Deferring all the tax liabilities which are due to be paid in July
- Releasing a grant in order to cover the rent debt while closing, reopening and starting the recovery process.
- Reducing VAT to 5% in the tourism services temporarily.
- Extending the business rates holiday to March 2022.
The letter concluded by stating that the experience of physical hospitality cannot be given digitally and has urged for aid and support from the Government.