Spring statement provides 'insufficient support' for the rural economy, says CLA

CLA welcomes zero rate VAT for energy saving materials but expresses disappointment about the failure to keep VAT at 12.5% for hospitality

The Chancellor of the Exchequer Rishi Sunak has unveiled his 2022 Spring Statement.

Following extensive lobbying from the CLA and other business groups, Mr Sunak announced that the 5% reduced VAT rate on the installation of energy saving materials in residential properties will be subject to zero rate VAT until 31 March 2027. This will be hugely beneficial to people looking to decarbonise their homes.

The CLA however is disappointed in the lack of support being made available to rural businesses, with 12.5% VAT rate for hospitality not being extended past 1 April.

In response to the announcement, CLA Deputy President Victoria Vyvyan said:

While the Chancellor’s Spring statement had some positive elements, including the increase in the threshold for National Insurance and a reduction in VAT on energy-saving technologies in homes, there was insufficient support for the rural economy and hospitality businesses.

CLA Deputy President Victoria Vyvyan

"The failure to keep VAT at 12.5% for hospitality businesses will have a sizable impact on profitability at an already testing time for many. This is a blow for rural businesses that are being asked to diversify, and the reduction in business rates will not plug this gap. If the Government is serious about supporting the countryside, it must create the environment for rural businesses to thrive.”

Read the Spring Statement