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Reducing food and drink VAT from 20% to 10% would create hundreds of thousands of new jobs within the hospitality sector, claims a new report by campaign group VAT Club . A total of 425,000 jobs would be created if the government halved VAT, with an additional 150,000 jobs if VAT was slashed to 5%. Jacques Borel said the research carried out by his VAT Club revealed that VAT cuts in other EU countries have resulted in price reductions as well as increased consumer demand. He believes that the high rate of VAT applied to pubs, hotels and restaurants is "restraining the growth of the UK hospitality industry." Borel has in the past campaigned and won VAT cuts for the hospitality and leisure industries in countries including France, Germany, Sweden and Ireland. He stated that lowering VAT in the UK would offer a "viable solution" to the increase to the minimum wage which is expected to result in increased costs for hospitality and leisure businesses. "By lowering the rate of VAT in the sector, the government will reduce the unfair competition from supermarkets which benefit from the zero VAT rates that apply to the food it sells and which is used to subsidise the sale of alcoholic drinks," he added. The campaign group has garnered support from dozens of UK food and drink companies and earlier this week, JD Wetherspoon PLC announced that it would be supporting the campaign, reports a London South East article. VAT Club will submit a report to the government claiming that cutting VAT from 20% to 10% will result in a surplus of £111 million for the Treasury after three years.
