Caithness hotelier says VAT cut 'goes some way to salvage our sector'
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A CAITHNESS hotelier has described the 15 per cent cut in VAT for the hospitality industry as very welcome and said it will help the sector in what has been "a difficult trading year".
Andrew Mackay, who owns the Norseman in Wick, the Pentland in Thurso and the Castletown Hotel, was speaking after Chancellor of the Exchequer Rishi Sunak announced he is cutting the tax from 20 to five per cent for a six-month period. The measure – one of many to try and help the economy recover in the wake of the coronavirus pandemic – starts on Wednesday and runs until January.
Mr Mackay said: "This is something the hospitality sector has been campaigning on for a number of years. The VAT payments we make have a particular impact on our businesses – many of which are small or medium-sized enterprises – compared with other industries.
"The announcement by the Chancellor was very welcome indeed and goes some way to salvage our sector in what has been a difficult trading year with many of us fighting for survival. It is great getting this for six months but it would have been much better if it had been extended into next season, as we need to trade successfully in the summer to help us through the winter months which can be quite challenging."
Trudy Morris, chief executive of Caithness Chamber of Commerce, also welcomed the VAT cut but expressed disappointment it did not include the retail sector.
"A targeted reduction in VAT for the tourism and hospitality sector as it moves towards reopening has been a key ask for the chamber network, and we are pleased that the Chancellor has listened and stepped up to provide this much-needed reduction," she said. "We have long argued that the UK's tourism sector suffers by comparison to our European neighbours as a result of an unusually high rate of VAT, and we hope the Chancellor will give serious consideration to implementing VAT reduction not just as a means of immediate support but as a long-term boost for the sector."
But she added: "It is disappointing that a similar reduction has not been provided to businesses in the retail sector, as this would have acted to provide a boost for our high streets. We would strongly urge the Chancellor to consider this reduction in his autumn budget."
Ms Morris said the measures announced by the Chancellor will result in an extra £800 million being made available to the Scottish Government.
"It is imperative they listen to business and target support measures where they are most needed," she said. "We will be working closely with our members and our colleagues in Scottish chambers over the coming days and weeks to understand what support businesses in the north Highlands require and ensuring that this is communicated to Scottish Government."
Caithness, Sutherland and Easter Ross MP Jamie Stone was pleased with VAT for tourism and hospitality industries but said: "It is not going to make up for the profits those businesses have lost during this year's high season.
"I have been campaigning for a 12-month support package to support these businesses through the dark winter months in the far north. Yet again, Mr Sunak ignored the case for that support package."
