Chancellor Rishi Sunak has announced a major boost for the hospitality and tourism sectors - as well as their customers - by extending the reduction in VAT.
Announcing a Winter Economy Plan Mr Sunak revealed new measures designed to support the economy in the face of the ongoing coronavirus pandemic.
In the last major update from Mr Sunak VAT for hospitality and tourism businesses was reduced from 20 per cent to 5 per cent.
Most businesses - such as McDonald's and Costa Coffee - passed on this discount to their customers.
The scheme was due to end on January 13.
But Mr Sunak announced a change at the end of a new package of measure unveiled in the House of Commons today.
He said: “The final step I’m taking today will support two of the most affected sectors, hospitality and tourism.
“On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13.
“So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I’m announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year.”
