July 8, 2020 / 1:44 PM / a month ago

Britain cuts value-added tax to 5% for hospitality sector

A bartender prepares to open the bar in The Life Goddess restaurant, amid the coronavirus disease (COVID-19) outbreak, in Soho, London, Britain, June 29, 2020. REUTERS/Henry Nicholls

LONDON (Reuters) - Britain will cut value-added tax (VAT) on spending on hotels, restaurants and tourist attractions, and subsidise temporary discounts on eating out, to boost demand for services hardest hit by the COVID-19 lockdown, finance minister Rishi Sunak said on Wednesday.

The standard 20% rate of VAT will be lowered to 5% from next Wednesday until Jan. 12, 2021 for the hospitality and domestic tourism sector at a cost of around 4 billion pounds, Sunak told parliament during a statement on the outlook for the economy.

Separately, Sunak said the government would subsidise half-price restaurant meals served on Mondays, Tuesdays and Wednesdays in August.

British high-street retailers, as well as pubs and restaurants, have so far seen only around half their customers return as lockdown measures have been partially relaxed in recent days and weeks.

Reporting by David Milliken; editing by Stephen Addison

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