Visit Lincoln has backed a campaign to persuade the government to extend the VAT cut for hospitality and tourism sectors to 5% for another year.
The Lincoln organisation has joined forces with UK Hospitality, Tourism Alliance and Live Music Industry Venues & Entertainment for the campaign.
It calls for the government to safeguard the hospitality and tourism sectors by extending the 5% VAT rate, introduced for eligible businesses in July 2020, to way beyond the March 31 deadline.
As it currently stands, the VAT rate will return to 20% after this date, something which Visit Lincoln say would leave the industries on the verge of collapse.
Trade associations involved with the campaign have estimated that just one in five businesses have enough cash flow to survive beyond February, unless financial support increases.
Charlotte Goy, chief executive for Visit Lincoln, said: “We’ve spoken to many Lincolnshire businesses about what support they need, and an extension in the VAT cut is at the top of the list.
“When restrictions lift, businesses want to trade their way out of COVID and there is certainly enough pent-up demand to make this a possibility.
“But in order to recoup their losses, and build back up their reserves, the VAT for tourism has to stay at 5% for at least the next 12 months – if not longer.”
As well as the VAT reduction, the campaign will also ask government to extend business rate relief and retain furlough for businesses impacted by any travel restrictions or social distancing.
Karl McCartney, MP for Lincoln, responded to the campaign via The Lincolnite: “The temporary reduction in VAT (5% from 20%) for hospitality and tourism businesses has been extended until 31 March 2021.
“I am not aware of any immediate plans to extend the reduced rate of VAT or the business rate holiday, however I would add that the reduced rates / holidays have not yet ended.
“I have passed the comments of Visit Lincoln on to my colleagues at the Treasury to ensure they are aware of the strength of feeling on this issue.”
Matt Warman, MP for Boston and Skegness, said: “The Treasury has provided vital and extensive support to a host of industries over the course of the pandemic.
“Without it many more businesses and individuals would have suffered – I’ve made the value of those schemes to people across Boston and Skegness very clear to the Chancellor and his team.
“I know he’ll be taking them into consideration as he develops the package of measures for the post-Covid recovery that the forthcoming budget will drive forward.”