Alton Towers and Madame Tussauds owner Merlin has called on the Government to hold back on plans to hike back tourism VAT in April as it warned its recovery “slowed” in the face of the spread of the Omicron variant.

VAT on tourism, food and soft drinks is currently at 12.5% following pandemic support from the Treasury but is set to jump back to 20% in April.

However, bosses at Merlin Entertainments said such a move “will have a significant adverse impact on the tourism sector at a time when it is finally starting to turn a corner”.

Mike Vallis, divisional director at Merlin, said it is seeking to recoup its pandemic losses from the past two years and called for more help to aid its longer term recovery.

“Although UK visitor attractions benefitted from domestic tourism during 2021, there continues to be a dearth of overseas visitors which continues to have a significant adverse impact on overall numbers and revenue for the sector as a whole,” he said.

“In addition, the recovery was significantly slowed over the winter period due to the rise of the Omicron variant and the Plan B restrictions.

“In light of this, we continue to support the collective view of our industry that a lower rate of VAT needs to remain in place for tourism.

“We firmly believe that keeping the current lower rate of VAT in place will help drive demand, create jobs and give the tourism sector a strong boost on the road to a long-term, sustainable recovery.”

Hospitality bosses have also called for the 12.5% VAT rate to be continued ahead of the Chancellor’s spring Budget announcement.

Merlin, which employs about 10,000 people in the UK, made the calls a week after sealing a deal to take control of the Cadbury World attraction near Birmingham.