London Daily

Focus on the big picture.
Thursday, Oct 09, 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
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
×