4 October 2021: For restaurants and pubs, VAT increased from 5% to 12.5% from 1st October 2021. Owners of these business feel the increase is badly timed as they are already hanging on by a thread. The industry is slowly recovering from the pandemic and further rises will only have a negative impact on them.
VAT – the tax paid when buying goods or services – has been levied at a reduced rate in pubs, restaurants and other hospitality businesses since July 2020 to help them stay afloat during the pandemic. The sales tax won’t return to its pre-pandemic rate of 20% until April 2022.
In addition to the VAT increase, businesses are also having to cope with rising import, energy and staffing costs. Suppliers have increased prices to help them recover from the pandemic. Shipping costs on imports have also significantly increased.
Many businesses are saying that they cannot take on any extra costs and they are left with no option but to pass the costs onto their customers. These businesses feel they still need more help to secure the future of existing restaurants and pubs and also to protect jobs.
Temporary measures to support these businesses as they recover from the pandemic have come to an end and if you feel you and your business need assistance in long-term recovery planning and would like to explore the options, please contact any one of BRI’s experienced management team.