One of Britain’s largest takeaway sectors campaigns for extension to VAT reduction to help hospitality industry get back on its feet.
Ibrahim Dogus, Chair of the Kebab Alliance, the UK’s industry trade body, is campaigning for the reduced 5% VAT rate that was introduced for the hospitality sector last July to be extended until March 2022. It has been temporarily reduced to 5% for restaurants, bars, hotels and attractions by Chancellor Rishi Sunak until the end of September this year. But considering that a quarter of the year has already lapsed into a lockdown with the hospitality industry struggling to recover from a year-long loss of coronavirus, Kebab Alliance is urging that the Treasury extend the VAT reduction scheme until March next year.
Ibrahim Dogus, a Labour Party councillor, who owns a number of restaurants in London and is also Chair of the British Takeaway Campaign, said, “The hospitality sector has been hugely challenged by the unprecedented events of the last 12 months and the kebab industry which generates some £2.8bn for the UK economy is no exception.
“Like other hospitality industries, the kebab industry generates significant jobs and plays a key role in communities the length and breadth of the country. We are therefore calling upon the Government to back the whole sector and keep the reduced VAT rate for a minimum of 12 months, rather than as planned, increasing it to 12.5% in six months’ time.”
Founder of the British Kebab Awards, further said, “Recovery will take time, it’s not going to happen quickly as customers’ confidence needs to be rebuilt and the hospitality sector will still be operating under restrictions post April 12th. At the same time businesses in the sector have to contend with significant rent bills that have mounted up during the last 12 months. Extending the reduced VAT rate will be a lifeline to the kebab industry and to other restaurants and takeaway outlets, helping food businesses to sustain themselves in the longer term.”
Dogus’s proposed VAT extension follows pub chain JD Wetherspoon vowing to keep to a 28% price drop on food and drink served to its customers if the Chancellor stuck permanently to the reduced rate of 5%.
Maz Demir, Executive Chef and Owner of Skewd Kitchen, London, comments, “It’s important for the kebab industry and I’m sure a lot of others in the hospitality sector too, that the VAT rate of 5% is kept in place for longer than planned, at least for another year, as that will really help businesses get back on their feet, as we emerge from lockdown. Rent bills have mounted up and we’ve also had to contend with the rising cost of importing fresh produce in the wake of Brexit. Anything that can be done to keep costs lower in the short to medium term will really help all restaurants and takeaways.”
