BUSINESSES and customers are set to benefit from VAT reductions to the tourism and hospitality industry as many big name brands and independents are set to lower prices.

Big chains in Barrow such as McDonald’s, KFC, and Wetherspoons are among those food chains planning price cuts for customers as £4.1 billion of VAT cuts come into force.

The Government has slashed VAT on hot meals, accommodation and attractions from 20 per cent to 5 per cent for the next six months.

One local business benefitting from these cuts is the Lakes Hotel Group which runs multiple hotels in the South Lakes region.

Jonathan Denby, managing director of the Lakes Hotel Group, said: “First of all we really welcome this cut in VAT.

“We have been pressing the Government for years to cut VAT for the hospitality industry.

“All our competitors overseas have VAT rates of around five per cent permanently.

“This cut is intended for those businesses who have suffered during the lockdown.

“We offer competitive prices and they will become even more competitive as a result of this.

“As a group we are celebrating this news by doing a three nights for two offer, which is a third off if you stay for three nights.

“This cut was a gesture to help businesses, but we a re sharing this with our customers across all our hotels.

“The response has been excellent so far as we have had to start a clean slate focusing on British tourists after a lot of our business was lost from overseas.

“All our hotel staff are back from furlough with big smiles on their faces ready to great our customers.”

The Treasury estimates that households could save £160 a year as a result of the changes.

Last week, Chancellor Rishi Sunak announced the cut, which will remain in force until January 12, 2021 alongside plans to give people a 50 per cent discount, up to £10 per head, to eat out in restaurants in August.

Wetherspoon chairman Tim Martin said: “Wetherspoon has campaigned for tax equality between pubs, restaurants and supermarkets for many years.

“Supermarkets pay no VAT on food sales and pubs pay 20 per cent.

“Supermarkets pay about two pence per pint of business rates and pubs pay about 20 pence.

“These tax differences have helped supermarkets to subsidise their selling prices of beer, wine and spirits, enabling them to capture about half of pubs’ beer sales.”

McDonald’s said it is recommending a cut in the price of popular items on its menu and meal deals to its franchisees.