Pub and restaurant goers are set to suffer huge and ‘inevitable’ price increases as VAT returns to 20% today after being discounted to 12.5% during the pandemic. Trade body UKHospitality has said that the increases in the double digits are to be expected in the coming weeks.
“Given the unfolding cost-of-living crisis for consumers and soaring operating costs for businesses, the return to 20% VAT for the sector will prove nothing less than catastrophic,” said Kate Nichols, chief executive of UKHospitality.
“The now inevitable price rises for consumers will dampen demand and many hospitality businesses - one in three having less than a month of cash reserves and most are carrying heavy debt burdens - will fail as a result. This can only cause the UK’s wider economic recovery to falter.”
