VAT cut to 5% EU minimum for restaurants and bars, but no help for gyms

  • Gyms suffering ‘just the same problems’ as other leisure businesses, but they are left out of VAT reduction

The Chancellor’s announcement that VAT will be cut to 5% for the hospitality sector is very welcome, but gym and fitness businesses have been left with no help.

The Chancellor today announced that VAT for restaurants, bars, cafés and hotels will be reduced to 5% - the minimum allowed by the European Union. However, gyms have faced all the same problems as the hospitality industry and have been left out of the VAT cut.

Sean Glancy, VAT & indirect taxes partner, says: “Gyms have suffered just the same problems as other leisure businesses, but they have been left out of the VAT cut.”

“Some would argue that the VAT cut should have been extended to alcoholic drinks sold in restaurants and bars.”

“French-style low VAT on food and drink in restaurants and pubs will be a significant help for our leisure industry – it should jump-start the sector and get people back in the doors. Gyms need just as much assistance from the Government, however – they haven’t even been allowed to reopen yet.”

“There has been much talk about the risk of a wave of insolvencies among restaurants and bars but leaving gyms out of the VAT cut means that sector should now be on the watch list too.”

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