THE UK can “kiss goodbye” to the hospitality industry if normal rates of VAT apply when hospitality businesses finally emerge from the latest lockdown, it is claimed.

Andy Lennox – of the industry’s Dorset lobby group Wonky Table – spoke out after a minister said there were “no current plans” to extend the current discounted rate of in VAT for tourism and leisure, pubs and restaurants.

The government has been warned that reopening bars and restaurants before May could lead to another rise in Covid-19 cases. But industry representatives fear keeping premises closed without more government help could put thousands out of business.

VAT on eating out is currently at five per cent, but is due to return to 20 per cent by the end of March.

Mr Lennox said if the cut was not extended, the UK should “kiss goodbye to an industry”.

“This is the national industry lifeline which we have been counting on for our recovery,” he said.

He told the Daily Echo: “Hospitality continues to do our part and stands ready for any call for us to help. However, it must be understood, that if we do not open until April (and if that it is anything other than Tier 1), the industry just won’t survive without further government help.

“We are on our knees. There is no more money to keep going. If the industry opens in April we will have had just three months of unrestricted trade in over 12 months. We have all experienced significant losses, we've borrowed everything we can to survive – there isn't anything else we can now do.

“Further grants have to be forthcoming – something that pays more than the utilities bill each month. VAT at five per cent and rate relief must be extended for another 12 months at least.”

Kris Gumbrell, Bournemouth-based founder of the Brewhouse & Kitchen chain, said thousands of pubs could close without more government support.

He said the government’s current measures – including a one-off grant of up to £9,000 for closed businesses – did not cover people’s losses.

His own pub in Southbourne cost £3,000-£4,000 to close with each lockdown and costs £1,500 a week while closed, he said.

“A £9,000 one-off payment doesn’t touch the sides,” he added.

He said reduced VAT and an extended period without business rates would be vital.

“It’s going to be a grim three to four months but if people knuckle down in the area and comply, Bournemouth could really bounce back as soon as we’re able to trade in the summer,” he said.

Treasury minister Jesse Norman told the Commons this week that the VAT relief “comes at significant cost, and while the government keeps taxes under review, it has no current plans to extend it further”.