With the requirement for jobs always on the increase, it makes sense for a VAT cut on food and drink in the hospitality sector to try and meet the demand. VAT cuts in other EU countries has proven that customers dine out more frequently when they know there is a saving to be had. There are a number of big name businesses backing the campaign and a report is due to be submitted to the Treasury in October 2015.
A reduction in VAT on food and drink in the hospitality sector from 20% to 10% could result in the creation of 425,000 new jobs as well as offset the cost to employers of the new National Living Wage. That's according to the latest figures from campaign group VAT Club Jacques Borel. The group says the new jobs would be created across the UK in pubs, restaurants, catering and visitor accommodation over a three-year period, as a result of lower prices, improve food quality and better staff training, leading to increased custom. VAT Club Jacques Borel said the reduction to 10% would be the first step and that VAT should, at a later stage, be reduced to 5%, which would create a further 150,000 jobs (575,000 in total).