Hospitality must be granted an extension of the business rates holiday and VAT cut if it is to contribute to the country’s 2021 recovery, UK Hospitality has said.

In a letter to chancellor Rishi Sunak ahead of this year’s budget statement, the trade body has called for a 12-month extension to the 15% VAT reduction, and a further business rates holiday into 2022.

It also urged Sunak to consider a number of proposals to safeguard businesses and jobs including a reformed Job Retention Bonus, and extension of the payment period for Government-backed loans to 10 years and a further deferral of tax payments to December 2021.

Speaking at MCA’s digital event, The Conversation, earlier this week, UK Hospitality CEO Kate Nicholls said the Government seemed to be taking a “very tough line” on furlough, refusing extensions, NI and pension funding or any flexibility going forward.

“I think they are at the point where they would accept that people need to be made redundant if businesses can’t afford to keep them on,” she told MCA.

Despite this, she added that the industry shouldn’t “accept anything,” and the trade body has continued to lobby for an extension of the CJRS until the end of June, allowing flexible furlough, as well as extra assistance in the hospitality supply chain in its budget proposal.

Commenting on the letter to the Chancellor, Nicholls said: “We know from recent history that hospitality has the economic clout to be in the vanguard of economic recovery once the crisis has passed, but only if essential support is extended.

“A wide-ranging package of financial support will give hospitality businesses the best chance of not just surviving the remainder of the crisis, but leading the UK’s economic recovery in the years ahead. If we get what we need, hospitality can spearhead the economic recovery of the country, revive high streets and provide employment and investment in every single region.”