A leading expert in the tourism industry has warned the Government that businesses are still in "survival mode" in a call for the 12.5 per cent reduction in VAT rate for tourism businesses to be made permanent.
Cumbria Tourism Managing Director, Gill Haigh, is calling for the Government to permanently lower the 12.5 per cent VAT rate to help "protect jobs" and "safeguard businesses" in Cumbria.
Chancellor Rishi Sunak is due to unveil his Autumn Budget and 3-year Comprehensive Spending Review (CSR).
Ms Haigh said: "Overall it’s been a positive summer following the devastating impact of £1.5billion losses for Cumbria’s visitor economy during the pandemic, but the visitor economy is highly seasonal and many operators are still in survival mode as we head into the crucial winter period.
"A commitment from the Government on VAT would protect local jobs and communities and help businesses to invest in their staff and longer-term sustainability.
"It is vital that the industry’s voice is heard and we are working closely with a range of regional and national trade partners to get this message across at the highest level."
Business owners in Cumbria have also expressed their concern over the prospect of the VAT rate being increased to 20 per cent as it was before.
Hotel Group Executive Manager at Lake District Country House Hotels, Joe Cobb, said: "The hospitality sector is the largest employer within our local community and the reduced VAT rate has helped businesses to build back following the challenges that the pandemic has produced.
"With the ever-changing world of staff shortages, supply chain struggles and increased costs, the prolonged support would allow businesses to continue to operate and support local communities.
"We very much welcome the calls for this extension and hope that the Government consider this further."
Mark Carruthers, who owns the Plough Inn in Wreay said it would be a "massive help" to his business if the VAT rate was kept at 12.5 per cent.
He added: "Even if it was just a freeze until we get through the winter, it would be a help.
"We've been busy, but I do know in terms of recruitment that some are struggling."
Owner of the Quiet Site glamping and camp site near Ullswater, Daniel Holder, said keeping the VAT rate low would allow tourism businesses in the area to re-invest in their projects and gain a competitive advantage.
He said: “Having the VAT [reduction] has really helped us to continue to re-invest in the business and staff for the last few months.
"Re-investment is absolutely key and having that money to put back into our business has been absolutely crucial.
"And it goes back to us being competitive on a European level.
"We are certainly not adverse to tax and tax on profit is absolutely fine, but we just think this is a particularly unfair tax for the hospitality industry."
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