VAT slashed for hospitality, but will hotel stays become cheaper?

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Rishi Sunak has slashed VAT rates for holiday accommodation and attractions in a much-needed boost for the UK tourism industry.

In his mini-budget today, the Chancellor revealed that VAT would be reduced from 20 per cent to 5 per cent and that the measure will run from July 15 until January 12 next year. 

Mr Sunak said: “This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses, and consumers everywhere – all helping to protect 2.4 million jobs.”

The temporary relief means that VAT rates for the sector are the lowest they have been since the 1970s and are now more in line with European VAT rates.