Yesterday the Chancellor of the Exchequer’s announced that the VAT cut of 15 per cent in the hospitality sector would be extended until 31st March.
There are many businesses on the Isle of Wight who will benefit from the VAT cut, but a lot of those businesses are some of the hardest hit by the Coronavirus pandemic.
Seely: Will be discussing Chancellor’s statement with Island’s businesses
Isle of Wight Conservative MP, Bob Seely, said:
“It’s good and important news that the Chancellor has announced the reduced five per cent VAT rate for the tourism and hospitality industry will remain in place until 31st March. This is much needed good news for many Isle of Wight businesses and something that I have been telling ministers we need.
“I’m glad the Chancellor has listened and is taking action.
“In general, we need a measured approach to this dreadful virus, one that protects the vulnerable without destroying the life chances of the young. I think the Government is working towards a better balance.
“I will be discussing the Chancellor’s statement with the Island’s business community to seek their feedback and I will continue to make sure that their voices are heard in Westminster.”
Bridgeman: Will help sector’s recovery from the first wave
CLA President Mark Bridgeman said:
“The CLA has been lobbying intensively for the VAT cut – from 20 per cent to five per cent – to be made permanent by Government.
“This extension will help the sector’s recovery from the first wave, and help weather the storm of the second. But for UK tourism to succeed in the long term, we will need to ensure we are competitive with other holiday hotspots such as France, Spain and Greece – all of whom charge far lower than the UK standard of 20 per cent VAT.
“Although the peak trade season is over, we want to be clear to the public that rural tourism businesses have gone to great lengths to become Covid-safe, and continue to work hard to ensure a safe and enjoyable holiday.”
Bailey: Many measures to welcome here
In response to the wider statement, including Pay as you Grow for Bounce Back Loans and the the new job support scheme, Nicola Bailey, Development Manager for Hampshire and Isle of Wight Federation of Small Businesses, said,
“There are many measures to welcome here that will make a real difference. It’s particularly encouraging to see that all small businesses will be able to access the new job support scheme without facing excessive paperwork, with a guarantee of help for the next six months.
“News of the ‘Pay as You Grow’ approach will mean relief for hundreds of thousands of firms, giving them the confidence to invest and hire today rather than tomorrow, providing a crucial option to suspend repayments for six months.
“We called for an extension to the deadline for emergency finance facilities and that extension has rightly been delivered. The assurance on credit ratings will be hugely welcomed by many worried small business owners.”
She went on to add,
“On the tax side, the greater space being promised on deferrals and the maintenance of the five per cent VAT rate for hard hit sectors are much needed, promising to shore-up demand for firms that are especially struggling. The extended deadlines for deferrals of VAT and self-assessment tax bills will help avoid cliff-edges in the future.
“We look forward to more details on the successor to the self-employment income support scheme. It’s right to provide support to the self-employed equivalent to that offered to employees, and the scheme should be opened up to those excluded from the first round of support measures.
“We are concerned that the Chancellor had nothing to say on support for those who were left out of the first round of support measures, not least the newly self-employed and company directors. The Government urgently needs to come forward with an emergency relief package for these groups which have dutifully paid their taxes and deserve help too.
“Equally, local lockdown grants in all four nations should now be extended to firms forced to closed that were counting on reopening in the coming weeks but now face the most difficult of winters. The statement is a very welcome and significant step forward, but there must be more to come.”