This week, Caterer and Hotelkeeper launches a major new campaign - SlashVAT, Boost Business - aimed at easing the burden of taxation on UK hospitality operators
It seems like a very long time since Prime Minister David Cameron proclaimed that the tourism and leisure industry was "essential" to rebuilding the economy. In fact it was less than a year ago - in August 2010.
And it was only in October of last year that the newly appointed pubs minister Bob Neill said he was "determined to protect the valuable role pubs play and help them to thrive".
Despite that, as the hospitality industry was just starting to count the cost of an unusually icy winter, the Government slapped an across-the-board VAT increase on our ailing economy in January. The rise was a full 2.5 percentage points - taking VAT to 20%.
Since then, it has been a long, hard slog for many businesses. Official figures showed that UK economic growth was just 0.5% in the first three months of the year, while consumer spending dropped 0.6% over the same period. Meanwhile food inflation is running at almost 5%, posing problems for restaurants and caterers trying to keep hold of their cash-strapped customers.
If restaurants, hotels, pubs and caterers are surviving or even thriving, it is in spite of the Government and its VAT increase, not because of them. The effects also seem to have been particularly keenly felt in areas outside London, where firms are lucky enough to enjoy the benefits of a "two speed" economy.
Since the increase came into force, Caterer and Hotelkeeper has been keeping a close eye on VAT and how it is affecting you. As readers, you have written in to express your dismay not only at the huge disparity between VAT rates in this country and the much lower rates abroad, but also the beneficial effect that you believe reducing the rate will have not just for your business but for the economy as a whole.
It is a view shared by prominent hospitality figures like JD Wetherspoon chairman Tim Martin and Guy Parsons, chief executive of Travelodge. And as the British Hospitality Association (BHA) has pointed out, tourism is the only export industry in the UK that is taxed domestically.
That is why Caterer and Hotelkeeper will champion the industry's views on VAT with the Slash VAT, Boost Business campaign. Over the coming months, we will work to:
● Highlight why VAT at 20% is so uncompetitive for the UK both in the pages of Caterer and Hotelkeeper and on our website at www.caterersearch.com/slashVAT.
● Demonstrate how a reduced rate could benefit this sector as well as the economy as a whole.
● Determine the most realistic level of VAT for hospitality businesses on the basis of research, Caterer surveys and collaboration with industry bodies like the BHA.
● Provide a platform for you to share your views on the issue, within a dedicated channel on our Table Talk forum, through our dedicated campaign e‑mail address (slashvat@rbi.co.uk), or on Twitter (www.twitter.com/slashVAT).
● Create an online petition to present hospitality's views on VAT to Government.
second rate
Only one country - Denmark - has a higher rate of VAT for hospitality businesses than the UK, at an eye-watering 25%. Last week, Ireland dropped its rates for all tourism-related goods and services, which includes hotels, restaurants and pubs from 13.5% to 9% until the end of 2013. Here are the rates of VAT that some other European countries pay
Belgium
Hotels 6%
Restaurants 12%
Bars and cafés 12%
France
Hotels 5.5%
Restaurants 5.5%
Bars and cafés 5.5%
Germany
Hotels 7%
Restaurants 19%
Bars and cafés 19%
Italy
Hotels 10%
Restaurants 10%
Bars and cafés 10%
Luxembourg
Hotels 3%
Restaurants 3%
Bars and cafés 3%
Netherlands
Hotels 6%
Restaurants 6%
Bars and cafés 6%
Spain
Hotels 8%
Restaurants 8%
Bars and cafés 8%
Source: Hotrec VAT table, rates as of 1 January 2011
three easy ways to show your support for the campaign
Get behind our SlashVAT campaign and you could help change your industry, and your bottom line, for the better. To get involved:
Follow us on Twitter at www.twitter.com/slashVAT for news and updates on how the campaign is going
Visit our Table Talk forum and share your views and experiences on VAT. What should the Government set VAT at for hospitality? How is the 20% rate affecting you? What benefits could a cut in VAT bring? Log on toTable Talk to join the debate
Write to us. If you have suggestions for how we can make the campaign more successful, or if you want to see your views printed in the pages of Caterer and Hotelkeeper, get in touch on our dedicated e‑mail address: slashvat@rbi.co.uk.