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Monday, 19 November 2018

Budget announcement provides update on tourism related VAT in Northern Ireland

Following the Chancellor of the Exchequer’s Budget announcement, the CTV campaign received clarification on the legislative framework prohibiting the reduction of tourism VAT in Northern Ireland, as well as positive news on how the government will move forward on the issue of tourist related VAT.

The Budget report stated that under EU law, it is not possible to introduce differential VAT rates within a single VAT territory under EU law. This was the government’s most prominent reason for objection, a technical point which they knew before the consultation started, rather than an objection to the policy itself. After the UK leaves the EU in March 2019, the regulation will no longer apply, which means that the possibility of a reduced rate of VAT in Northern Ireland will be legally possible.

There were further signs of the Governments’ commitment to CTV, as they declared that they would continue to analyse the evidence and receive representations on VAT policy in order to keep these issues under close review. The Budget report highlighted how CTV demonstrated the strong arguments for the tax cut, and determined that the government will take these arguments into consideration in future policy development, ensuring that there is a system in place which encourages and supports economic activity. The government stated that it will continue to support the tourism industry in Northern Ireland and the rest of the UK, working further with stakeholders to ensure it builds on the existing growth and success of the tourism industry.

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