Hospitality VAT reduction and the VAT Is The Problem campaign

Summary

That this House recognises the vital contribution made by the hospitality sector to local economies, employment, tourism and community life across Wales and the UK; notes with concern the significant financial pressures facing pubs, restaurants, cafés, hotels and other hospitality businesses as a result of rising operating costs; further notes that the current standard rate of VAT of 20% places an additional burden on businesses already struggling with increased energy, staffing and inflationary costs; believes that the hospitality sector has a crucial role in supporting jobs, skills development and economic growth, particularly in rural and coastal communities; observes that many European countries apply reduced VAT rates to hospitality services, often around 10% or lower, in recognition of the sector's economic and social value; therefore calls on the Government to reduce VAT on hospitality to 10% in order to support business viability, stimulate investment, protect jobs, encourage tourism and help consumers with the cost of living; and endorses the campaign entitled VAT is the Problem and its call for a fairer VAT regime that enables hospitality businesses across Wales and the UK to thrive and continue serving their communities.

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Timeline

1. 12 October 2026

   Early Day Motion

   That this House recognises the vital contribution made by the hospitality sector to local economies, employment, tourism and community life across Wales and the UK; notes with concern the significant financial pressures facing pubs, restaurants, cafés, hotels and other hospitality businesses as a result of rising operating costs; further notes that the current standard rate of VAT of 20% places an additional burden on businesses already struggling with increased energy, staffing and inflationary costs; believes that the hospitality sector has a crucial role in supporting jobs, skills development and economic growth, particularly in rural and coastal communities; observes that many European countries apply reduced VAT rates to hospitality services, often around 10% or lower, in recognition of the sector's economic and social value; therefore calls on the Government to reduce VAT on hospitality to 10% in order to support business viability, stimulate investment, protect jobs, encourage tourism and help consumers with the cost of living; and endorses the campaign entitled VAT is the Problem and its call for a fairer VAT regime that enables hospitality businesses across Wales and the UK to thrive and continue serving their communities.

   Source: Early Day Motion

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Sponsors

• Llinos Medi · Plaid Cymru · Primary sponsor

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