The hospitality sector has issued a plea for the chancellor to extend VAT support beyond April as rising inflation threatens to inflict more damage on an industry among those worst hit by coronavirus restrictions.

UKHospitality said that the pandemic had resulted in almost £115bn of lost sales since March 2020 for its businesses, including coffee shops, hotels, pubs, restaurants, leisure parks and nightclubs.

The body said it meant that the £140bn-a-year industry was 43% down on what it would normally expect – with the losses equating to 45 weeks of sales over the near-two year period.

It warned that the recovery was now at risk from “rising costs across the board” as inflation hits a near 30-year high – with the worst yet to come amid predictions consumers will be tightening their belts considerably.

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The Bank of England warned this month of a record slide in living standards ahead as households face up to an average hike of almost £700 in the energy price cap from April.

Rising raw energy costs also feed into the prices paid – and subsequently charged – by businesses.

UKHospitality said the industry was also grappling 400,000 job vacancies and argued it was imperative that the government maintained VAT at its current level of 12.5% in April when the tapering of the tax support is due to end.

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Its chief executive, Kate Nicholls, said of the sector’s cumulative COVID losses: “These figures lay bare the utter devastation that two years of this terrible pandemic has wreaked on the third largest private sector employer in the UK, with thousands of businesses closed, many on the brink of collapse, and countless jobs lost.

“The last thing operators need – and which a lot of them simply wouldn’t survive – is a VAT increase.”

Sky News has contacted the Treasury.

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