Hospitality wants permanent VAT cut, 'not gimmick'

Hospitality and tourist businesses in Cornwall are calling for a temporary VAT reduction scheme to be widened and extended.

The government's £300m Great British Summer Savings scheme aimed to help families with the cost of the summer holidays. The temporary 15% VAT reduction, from 20% to 5%, applied to family attraction tickets, children's meals and cinema tickets for just under 10 weeks.

Keith Southwell, managing director of Lappa Valley Railway, said it "hadn't made any difference whatsoever" to his business, with many customers "benefitting but not even realising".

The government said the scheme was "increasing footfall for businesses over the summer... and boosting local economies".

Since the end of June until 1 September, VAT was reduced on children's meals served in restaurants, as well as kids' and family tickets for cinemas, shows, exhibitions and outdoor venues and activities.

Tara Stapley, the general manager of the Big Sheep Farm and Theme Park in Bideford in north Devon, said: "Numbers have increased slightly and I think that is partly down to the summer savings scheme."

The business reduced ticket prices and added more children's meals to the menu.

Stapley said there were "lots of people calling and asking about it".

She said: "People coming have been quite pleasantly surprised by our ticket prices and we're saying we're part of the summer savings scheme and they have been very grateful for that."

Stapley added the scheme could have been publicised more as "a lot of people didn't know about it".

She backed any extension of the scheme "100%, if that happened we'd be dancing on the ceiling I think" and said it would be helpful for families and businesses over the October half term and Halloween.

Stapley said days out can be expensive: "We want to make that as affordable as possible and memories that last a lifetime for them.

"Anything that the government can do in extending the scheme would be a huge help not only for us but the people who want to visit our site as well."

Southwell, also chair of the Cornwall Association of Tourist Attractions, said he had initially thought it was "a great idea".

He added: "But I know some attractions have not reduced the price but taken that money and used it for their attraction, which, in fairness, is fine because otherwise they might have had to have put their prices up."

He said a permanent 0% or 5% VAT rate for attractions "would allow all of us to invest for the future".

Lappa Valley head of marketing Matt Bunt said it was "amazing that families are able to keep a bit more money in their pockets", but added the "policy was put out in a bit of a rush and not very well publicised by the government".

Pete Fraser, from the Harbour Lights fish and chip restaurant in Falmouth, said dine-in children's meals had been £2 cheaper and "it may have pushed up [people's] spending a bit".

He said: "Families may be going for a pudding or an extra drink as well, so it's been useful.

"[However,] I hate to use the word 'gimmick', but then it's gone and we're back to where we started again.

"We roll off into the winter and the fun starts trying to balance the books, and that's when we need the help."

Allen Simpson, CEO of UK Hospitality, said the policy meant families were perhaps "able to have one more day out in the summer holidays" and "spending money that they wouldn't otherwise have spent".

"Hopefully that's a lesson that the government can take forward into the coming months," he said.

Visit Devon's director Sally Everton said the scheme should have run to 1 November, to cover the autumn half term and the pre-schoolers whose families go on holiday after the main summer break, rather than finishing at the end of the August bank holiday weekend.

Some venues in Devon offered "kids eat fee on some meals "as it was easier to manage and was a "real buy-in point for a lot of people".

Everton said some venues told her "it's not worth it" as they found it a "logistical nightmare".

She said the move was welcome but thought cuts should be "broader and it needs to be permanent".

"The VAT is a killer to so many businesses."

"In an ideal world a reduced VAT across a broader hospitality sector and permanently would be the ideal situation."

A Treasury spokesperson said: "Our Great British Summer Savings has benefitted businesses and families from across the South West.

"The scheme is increasing footfall for businesses over the summer, getting more people through the door and boosting local economies.

"This is on top of the chancellor cutting business rates by 20% for pubs, social clubs and live music venues - saving thousands of locals over £1,000 a year."

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