London Daily

Focus on the big picture.
Thursday, Oct 30, 2025

VAT cut for tourism and hospitality extended until March

A cut in VAT to 5% for hospitality and tourism businesses will be extended until March, the chancellor has said.

Rishi Sunak has announced the temporary cut, first introduced in July, will now be in place until well into the new year.

It had been set to finish in January but this date has been pushed back as businesses again grapple with restrictions due to the worsening pandemic.

Pubs and restaurants will have to close early from 10pm tonight and people are limited to gathering in groups of no more than six.

Announcing the extension as part of a raft of new measures in the House of Commons, Mr Sunak said: ‘The final step I’m taking today will support two of the most affected sectors, hospitality and tourism.

‘On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13.

‘So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I’m announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year.’



Businesses who have deferred their VAT during the pandemic will no longer have to pay a lump sum at the end of March, the chancellor also announced.

They will have the option of splitting it into smaller, interest free payments over the course of 11 months. This is expected to benefit nearly half a million businesses who deferred £30 billion, according to the Government.

VAT changes were first introduced by Mr Sunak in his summer statement on July 8 as a way of supporting businesses that had to close during the lockdown.

The cut applies to places that sell food and non-alcoholic drinks as well as hotels, holiday accommodation and tourist attractions.

Some chose to pass on the saving to customers while others used it as a boost for dwindling sales.

KFC, Nando’s and Pret all decided to slash prices to reflect the tax reduction. A meal out costing around £45 is more than £5 cheaper because of the cut, but only if the restaurant agrees to change their prices.

Around 150,000 businesses, with 2.4 million staff, are eligible for the cut.

The chief executive of trade association UK Hospitality, Kate Nicholls, welcomed the news and said it would help relieve some of the damage caused by the incoming 10pm curfew.

But she said although the plans were a ‘move in the right direction’, she wants to see more targeted efforts as well.

‘We need Government to go further in hospitality, recognising the greater restrictions imposed upon us, and pick up the full cost of unworked hours,’ she said.

‘Full support to sustain people in their jobs during what could be a pretty bleak winter for hospitality would be a great step forward.

‘The Chancellor has given us some reason to be positive again, but we urge him to engage with the trade on specific measures to keep people in work.

‘While some of these measures announced today will give businesses a future to shoot for, and hope that they can begin to rebuild, we are still not out of the woods.’

Full list of businesses entitled to VAT cut

* Restaurants, cafes and pubs

* Hotels, inns and hostels

* Holiday and caravan parks and other holiday accommodation businesses charging fees for tent pitches or camping facilities

* Shows

* Theatres

* Circuses

* Fairs

* Amusement parks

* Concerts

* Museums

* Zoos

* Cinemas

* Exhibitions

Newsletter

Related Articles

0:00
0:00
Close
UK and Vietnam Sign Landmark Migration Deal to Fast-Track Returns of Irregular Arrivals
UK Drug-Pricing Overhaul Essential for Life-Sciences Ambition, Says GSK Chief
Princesses Beatrice and Eugenie Temporarily Leave the UK Amid Their Parents’ Royal Fallout
UK Weighs Early End to Oil and Gas Windfall Tax as Reeves Seeks Investment Commitments
UK Retail Inflation Slows as Shop Prices Fall for First Time Since Spring
Next Raises Full-Year Profit Guidance After Strong Third-Quarter Performance
Reform UK’s Lee Anderson Admits to 'Gaming' Benefits System While Advocating Crackdown
United States and South Korea Conclude Major Trade Accord Worth $350 Billion
Hurricane Melissa Strikes Cuba After Devastating Jamaica With Record Winds
Vice President Vance to Headline Turning Point USA Campus Event at Ole Miss
U.S. Targets Maritime Narco-Routes While Border Pressure to Mexico Remains Limited
Bill Gates at 70: “I Have a Real Fear of Artificial Intelligence – and Also Regret”
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Amazon Announces 14 000 Corporate Job Cuts as AI Investment Accelerates
UK Shop Prices Fall for First Time Since March, Food Leads the Decline
London Stock Exchange Group ADR (LNSTY) Earns Zacks Rank #1 Upgrade on Rising Earnings Outlook
Soap legend Tony Adams, long-time star of Crossroads, dies at 84
Rachel Reeves Signals Tax Increases Ahead of November Budget Amid £20-50 Billion Fiscal Gap
NatWest Past Gains of 314% Spotlight Opportunity — But Some Key Risks Remain
UK Launches ‘Golden Age’ of Nuclear with £38 Billion Sizewell C Approval
UK Announces £1.08 Billion Budget for Offshore Wind Auction to Boost 2030 Capacity
UK Seeks Steel Alliance with EU and US to Counter China’s Over-Capacity
UK Struggles to Balance China as Both Strategic Threat and Valued Trading Partner
Argentina’s Markets Surge as Milei’s Party Secures Major Win
British Journalist Sami Hamdi Detained by U.S. Authorities After Visa Revocation Amid Israel-Gaza Commentary
King Charles Unveils UK’s First LGBT+ Armed Forces Memorial at National Memorial Arboretum
At ninety-two and re-elected: Paul Biya secures eighth term in Cameroon amid unrest
Racist Incidents Against UK Nurses Surge by 55%
UK Chancellor Rachel Reeves Cites Shared Concerns With Trump Administration as Foundation for Early US-UK Trade Deal
Essentra plc: A Closer Look at a UK ‘Penny Stock’ Opportunity Amid Market Weakness
U.S. and China Near Deal to Avert Rare-Earth Export Controls Ahead of Trump-Xi Summit
Justin time: Justin Herbert Shields Madison Beer with Impressive Reflex at Lakers Game
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
Giuffre’s Memoir Alleges Maxwell Claimed Sexual Act with Clooney
House Republicans Move to Strip NYC Mayoral Front-Runner Zohran Mamdani of U.S. Citizenship
Record-High Spoiled Ballots Signal Voter Discontent in Ireland’s 2025 Presidential Election
Philippines’ Taal Volcano Erupts Overnight with 2.4 km Ash Plume
Albania’s Virtual AI 'Minister' Diella Set to 'Birth' Eighty-Three Digital Assistants for MPs
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
×