Over 160 high street hospitality firms, including Pizza Hut, Burger King and Caffe Nero, have urged the Chancellor to extend the VAT reduction for a year.

The VAT cut is due to end on March 31, meaning hospitality business could be forced to increase prices to deal with the coronavirus pandemic.

In a joint letter, coordinated by trade body UKHospitality, the 166 firms, including hotel chains, also press the Chancellor to extend the business rates holiday in his Budget on March 3.

It states: “Given the right ­fiscal support in March and safe and sustainable trading conditions in place, we can help this country ‘bounce back’ from the pandemic in a safe and responsible way.”

The letter adds that extending the VAT cut for a year “will be critical to boosting employment, particularly in 16-24 year olds”.

NFFF President Andrew Crook said “Businesses need a longer range view so they can plan. The reduction not only protects jobs but as we emerge from the lockdown it will mean businesses can create new jobs, invest in training and hospitality can help to get the economy back on track.

We urge the Chancellor to extend the cut and to look at the system going forward so businesses are not suffocated by VAT in the future.”