UKHospitality calls for a VAT cut before the Autumn Budget
The trade body wants hospitality VAT cut from 20% to 10% and business rates reformed further, in a four-point campaign ahead of chancellor John Healey's 28 October Budget.
UKHospitality has asked chancellor John Healey to cut VAT on hospitality from 20% to 10% at the Autumn Budget on 28 October, as part of a four-point campaign called Budget26.
The trade body's other asks include further business rates reform, a bigger discount for hotels hit by the 2026 revaluation, a higher employer National Insurance threshold and a tourism bonus to replace visitor levies.
Business rates are the sharpest pressure point. The 2025 Budget set a permanently lower rate for properties under £500,000 in rateable value from April 2026, but UKHospitality says bills will still rise. Its analysis projects an average pub's rates will run £4,500 higher than today in 2027/28, and £7,000 higher in 2028/29.
Four asks, one Budget, and a sector betting its margins on a chancellor it cannot yet read.
Kate Nicholls, UKHospitality's chief executive, has argued that the 5p-in-the-pound discount already delivered covers only a quarter of the 20p maximum the government proposed last year.
The campaign also asks for the employer National Insurance secondary threshold to rise to £10,000 by April 2029, up from the lower level set in last year's Budget, which the sector blamed for cutting hours and jobs.
A tourism bonus would replace the patchwork of visitor levies now being considered by councils in Scotland and Wales, which UKHospitality argues layers new costs on top of VAT and business rates rather than easing them.
Four asks, one Budget
UKHospitality calls 28 October "a moment for change" for a sector it says has absorbed years of rising costs without matching revenue growth. The VAT ask alone, cutting the rate on hospitality and paid visitor attractions to 10%, would bring the UK closer to rates already applied in France, Italy and Spain.
Scotland and Wales have each set their own business rates policies this year, and UKHospitality has criticised both, pointing to a projected £122m rates bill from the Welsh Budget as a sign of what can go wrong without coordinated reform.
A sector still counting losses
The campaign lands weeks after UK hospitality insolvencies fell 24% in August, a sign the worst of the post-pandemic shakeout may be easing even as the trade body warns of fresh pressure ahead.
Whether the Treasury moves on any of the four asks will not be clear until the chancellor stands up on 28 October. UKHospitality says it will keep pushing its case "right up to the despatch box."
