Reducing hospitality VAT would 'directly affect' provision of frontline services

But treasury minister promises 2026/27 Budget will look at ways to relieve some of the pressure

Reducing the rate of VAT paid by hospitality businesses on the Island would directly impact government's provision of frontline services, according to the treasury minister.

It comes amid calls from the sector for help, as many say they're struggling with rising costs.

Currently, the rate is 20 percent, which mirrors the UK's as per the agreement between the two jurisdictions.

Alex Allinson told the House of Keys this week (Tuesday 4 November) that he doesn't have plans to have any conversations with the UK government about amending the rate of VAT paid by Manx hospitality businesses.

While he says any changes to it would drastically reduce government's income, Dr Allinson has promised that his February Budget will look at other ways to relieve some of the pressure: