Support for Businesses Covid-19
2020-12-01
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Response quality
Questions & Answers
Q1
Direct Answer
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Context
The question arises from the significant economic disruption caused by the pandemic, affecting business operations and employment across the UK.
What fiscal steps is his Department taking to support businesses affected by the covid-19 outbreak?
The Government recognise the extreme disruption that the pandemic has caused to business, employment and the nation's economy, and our goal remains to protect people's jobs and livelihoods. That is why we have provided one of the most comprehensive and generous packages of support, worth £280 billion.
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Q2
Direct Answer
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Context
The question addresses the current VAT reduction measures introduced to support businesses in specific sectors such as hospitality, leisure, and personal care. The temporary reduced rate was set to end on 31 March next year.
Is the Treasury willing to extend the VAT cut to the hospitality, leisure and personal care sectors, and will it perhaps encourage businesses to pass on that VAT saving to consumers?
The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of more than 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and it will run now until 31 March next year. This obviously comes at a considerable cost to the Exchequer, and while we keep all taxes under review, there are no plans to extend it further. Although the Government want businesses to pass on the benefit to customers if they can, obviously decisions on prices are ultimately for businesses rather than the Government.
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