The financial secretary to the Treasury has dampened hopes of a cut to hospitality VAT, after warning the reduction of the tax from 20 percent to 10 percent would “cost a lot of money.”
James Murray said the reduction would have to be “fully funded”, and declined to comment on whether alternative support measures will be included in the upcoming Budget.
“We want to support hospitality, but let’s be upfront about this,” said Murray. “If you’re having a big cut in VAT, it costs a lot of money, and anything that we announce, we want to make sure it’s fully funded, and we explain exactly how we’re going to do that.”
“So, when the prime minister announced 20 percent cut off business rates last month, we said exactly how we were going to pay for that. I’ll not get ahead of anything that might be announced at the Budget, but we need to keep looking at how we can support high streets and particularly pubs because they’re so important to everyone right across the country.”
Commenting on the importance of cutting hospitality VAT, UKHospitality chair Kate Nicholls said “cutting VAT is the fastest way to tackle the cost of living, make everyday treats for families more affordable and bear down on inflation.”
Originally published on Coinslot on September 7, 2026. Republished with permission.