Tax Changes May Impact Play Sector

Back in 2020, as part of the measures aimed at supporting the hospitality and leisure sector during the pandemic, Rishi Sunak, the Chancellor, announced a temporary reduction of VAT across a number of areas. This reduction to 5% was extended several times, eventually coming to an end in September last year, being replaced by a still lower than usual rate of 12.5%, which is scheduled to end on 31^st March 2022.

The indoor play sector was badly affected by the pandemic, being amongst the last businesses to be allowed to re-open, and the first closed when restrictions were tightened again. Added to reduced footfall in general due to the virus, many providers have struggled to remain in business. The reduced VAT, although far from the level of support many in the sector hoped for, has at least enabling providers to make up at least some of the revenue lost during the lockdowns and closures.

In response, trade association UK Hospitality, has launched its #VATsEnough campaign, demanding that the government make the VAT cut permanent. The campaign is also backed by the Association of Indoor Play, who are encouraging their members to get involved. Although there is no indication at present that the government are considering extending the cut, industry pressure has been shown to work before, and with inflation rising, there is a strong case for action that reduces families expenditure, or keeps businesses afloat.

You can read the government’s official guidance on the reduced rate here: https://www.gov.uk/government/publications/introduction-of-a-new-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions/

More about UK Hospitality’s #VATsEnough campaign can be found here: https://www.ukhospitality.org.uk/page/vatsenoughcampaign