Hospitality venues across Burnley are being urged to back a campaign calling for the government to slash VAT on the industry.

Andrew Brown, the founder of award-winning Crow Wood Leisure, and Justine Bedford, the respected landlady of the Royal Dyche pub, are among those backing the VATsTheProblem campaign launched by UKHospitality which is calling for hospitality VAT to be reduced from 20% to 10%.

Andrew Brown, whose Crow Wood complex includes a hotel and restaurants, said the sector was still feeling the effects of the pandemic alongside a range of mounting financial pressures.

He said: "During Covid, the plight of the hospitality industry was laid bare. Whilst many industries continued, albeit with some difficulties, the hospitality industry was not allowed to trade at all.

Burnley's Andrew Brown and Justine Bedford are backing a campaign to cut VAT for hospitality venues

placeholder image — Burnley's Andrew Brown and Justine Bedford are backing a campaign to cut VAT for hospitality venues

“Despite the Government's furlough scheme providing 80% of wages, all the other overheads continued. As a business, Crow Wood went £1.7 million into the red in the space of a few months.

“As Covid restrictions eased, along with other members of the hospitality industry, I suggested to the Government via the Chamber of Commerce that they follow most of Europe in reducing VAT to around the 8% mark. In actual fact, they reduced it to 5%.

“The problem for the industry now is that not only have energy costs spiralled and continue to do so, but the National Minimum Wage has increased above inflation. Changes to National Insurance contributions significantly impact the hospitality industry due to the huge numbers of young people employed. Business rates have also increased enormously, particularly for hotels but also for pubs and other establishments.

“The margins that hospitality has to work on are already painfully thin and, for some, they have not even paid back their Covid loans yet.

“As a generalisation, there are very few inputs that can be claimed against your VAT bill. For example, there is no VAT on wages, insurance, energy, rates and food. Therefore, effectively, for all restaurants and pubs they are simply handing 20% of their turnover over to the Government.

Tributes to Burnley and Nelson karaoke king Keith ‘Huggy Bear’ Hitchen who has d...

“In addition, a new environmental packaging tax has increased the cost of bottles of beer and wine significantly. The Government could easily reduce VAT for the hospitality sector. It is easy to police and quantify.

“The result would be the survival of many businesses which are currently hanging on by their fingertips and would encourage further investment and employment, providing a much-needed boost for young people.

“It’s not too late for the Government to act. They need to do so quickly.”

Justine Bedford, owner of the Royal Dyche pub in Burnley, has been vocal in recent years over the challenging facing the hospitality sector and pubs in particular.

She said: “Our industry has faced enormous challenges over the last few years and a reduction in VAT from 20% to 10% would make such an incredible difference.

"Pubs are the beating heart of communities across the UK, but the current VAT rate is holding businesses back.

"Cutting VAT to 10% would give pubs, bars, restaurants and hotels the breathing space they need to invest, create jobs, support local communities and help us keep our prices fair for our customers.

"I really hope people get behind the campaign and give the hospitality sector the support it deserves."