Our British partner association, UKHospitality, has lost its battle to maintain the temporary reduced VAT rate of 12.5%. Their arguments, extensive public opinion polls and the well-supported opinion of tax experts were not enough to convince the UK Chancellor of the Exchequer, so his interim report did not include the extension of the discount, which means that from 1 April the UK hotel and restaurant VAT will be 20% again. The trade association believes that this will result in a double-digit price increase, given the impact of energy and raw material prices, wage increases and labour shortages. However, the price increases could also have the effect that an increasing number of consumers will not be able to afford excessively high prices, which could lead to bankruptcies. However, the other eye of British colleagues crying over VAT is laughing, as it has been announced that during the ‘platinum jubilee’, which falls on the first weekend in June, some restaurants will be allowed to serve alcohol until 1am. Also positive news for them is that, in view of the £7 billion of rent debt accumulated during the crisis, the government has created a new regulation stipulating that the resulting debts are not immediately recoverable, but must go through an arbitration process whereby the viability of the tenants is maintained throughout. The regulation obliges property owners to cooperate in this process in a practical and flexible way.
