Gordon SNP MP Richard Thomson has called on the Chancellor of the Exchequer to maintain the reduced VAT rate for struggling hospitality and tourism businesses right through next year at the very least.
The call comes as the UK Government is set to increase the VAT rate to the pre-pandemic level of 20% - up from the temporary 12.5% rate currently.
Mr Thomson warned that businesses are already facing a tough winter due to rising fuel, staffing and supply costs, and the move to increase the VAT rate could push many over the brink.
Commenting, Richard Thomson MP said:
“I wrote to the Chancellor of the Exchequer last month in advance of the Budget following approaches from hospitality businesses in my constituency and urged him to maintain the current 12.5% VAT rate for hospitality and tourism businesses.
"Many of these businesses provide employment in rural areas of the North-east and are facing a tough winter – with staffing issues and rising fuel and supply costs.
"The Covid pandemic has dealt a heavy blow to many in the industry, pushing them into financial hardship and debt. It is critical that the UK Government takes the necessary steps to protect businesses at this time - and not prematurely pull support from under their feet.
"Maintaining the 12.5% VAT rate right through next year - not putting it up to 20% - would bring much needed financial breathing space and relief for our hospitality and tourism businesses.
"The reality is that the measures announced in last week’s Budget fell well short of the support needed to help our hard-hit businesses navigate through this turbulent period. I am again urging the Chancellor to do the right thing and maintain the 12.5% VAT rate right through next year at the very minimum."