VAT reduction for hospitality and tourism businesses

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Argyll and Bute Council has welcomed the UK Government’s decision to cut VAT for the tourism and hospitality industry.

VAT in the hospitality and tourism sectors on food, accommodation and attractions has been temporarily cut – from July 15 2020 to January 12 2021 – from 20 per cent to five per cent as part of the government’s three-phased economic response to the Covid-19 crisis.

Tourism in Argyll and Bute plays a significant role supporting the local economy, providing 15 per cent of employment and in 2019 contributed £510 million to the wider Scottish economy, according to the Scottish Tourism Economic Activity Monitor.

Councillor Alastair Redman, policy lead for economic growth, said: ‘The pandemic has had a major impact on our local economy with businesses and communities struggling with the effects lockdown has had on livelihoods. The temporary reduction in VAT is welcome and we hope as restrictions continue to ease our hospitality and tourism sector can start to recover.

‘We have all done a fantastic job safeguarding each other since March. Businesses are making considerable efforts to adapt and manage customer safety and it is now time to welcome visitors back safely.

‘Argyll and Bute has some of the most spectacular scenery in Scotland and we’re lucky we don’t have to travel too far to fully appreciate what a special place it is. We want to encourage visitors to return safely and help support our local businesses.’

More information about the temporary reduction in VAT can be found on the UK Government website.