I am pursuing change with the VAT charged on the hospitality industry and food manufacturing industry in a cost of living crisis. Since bringing this issue to light, it has come to my attention and realisation that our whole VAT system needs reforming. I plan to take this further than the hospitality and food manufacturing industry.

I would like to draw attention to this issue which could potentially save so many businesses in the UK, and also benefit the economy in one swoop, but something needs to be done in the very near future or we will lose so many SME's in the coming year. 

I would like to propose a 10% reduction on the standard rate of 20% VAT on the food manufacturing and hospitality industry for a trial period of at least 24 months. This would have a positive overnight effect. The hospitality industry alone accounts for 3.2 million jobs in the UK - that's 3.2 million lives this could potentially benefit, not to mention their families too.

It would mean businesses can keep that cash in their bank account to reinvest into their staff/operations/quality of what they’re producing or just simply to have it as a safety net in their account. Millions of businesses do not have a safety net at the moment and are literally living month to month.

If staff wages continue to rise, yet prices can remain the same, it would benefit the economy, meaning people can afford more and not live month to month either.

More importantly for the government, it would benefit them in the long run, with more corporation tax paid due to the effect on profits and tens of thousands of businesses can stay open to not only survive, but thrive.

The current VAT system is designed to support industrial growth, not growth that creates more jobs within creative industries. Small businesses do not have the cash that large corporations have to be able to buy in bulk, their running costs are higher because they don’t have the money to reinvest into the business. The only changeable factor here that will make an immediate difference and have the most positive impact, is a reduction in VAT.

The whole VAT system needs revisiting and modernising. Not by people who have never run a small business in their life, it needs to be by someone who is level headed, has experience and truly listens to the needs of both the government and the businesses paying the tax.

The reason we are talking about this now is because we are left with no other option. In the past businesses have just increased prices to accommodate, but in a cost of living crisis where customers have less expendable income than they ever have done, a price increase is not the answer. We need an intervention - one that I truly believe will benefit the economy and help to combat the cost of living crisis making sure businesses can stick around for the foreseeable future.

On the 20% standard rated scheme you can claim back VAT on your quarterly tax bill from all of the purchases you have made that quarter that have VAT charged to you on them.

There are problems with this.

Ingredients, which aside from wages, are the main costs in these industries. These have no VAT to claim back on. There are many other industries where what you buy in is already 20 percent standard rated, so you are able to claim this back off your VAT bill.

The cost of living crisis - like many small businesses all of our costs have risen eating away at our profits. I personally run a chocolate company and our chocolate, shipping, wages, all of our other ingredients, the prices of our postal packaging, our electricity have all increased by a significant amount. The list goes on.

We have received no help at all from the government despite small businesses everywhere closing left, right and centre.

Wage increases coupled with tax cuts - significant ones that will affect hundreds of thousands of people in the hospitality industry - will have a huge impact. It would mean we don’t have to raise the price of our products, yet wages continue to go up making things more affordable.

I am hoping this petition will start conversations across many industries as the VAT rules in general need modernising and restructuring.