LONDON - British finance minister Rishi Sunak said he would extend a cut to value-added tax for hotels, cafes and restaurants until March 31 to support the sectors which are struggling with the effects of COVID-19 on demand.

"So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I'm announcing today we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year," he told parliament.

The reduction in VAT to 5% from 20% began in July and had been due to expire on Jan. 12. ($1 = 0.7851 pounds)

(Reporting by David Milliken; editing by Kate Holton) ((david.milliken@reuters.com; +44 20 7542 5109; Reuters Messaging: david.milliken.thomsonreuters.com@reuters.net))