Cut Tourism VAT

Cut tourism VAT, boost british jobs

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Monday, 10 November 2014

Jim Shannon MP: Let Tourism in Northern Ireland compete

Jim Shannon MP represents the constituency of Strangford. In this post he writes about how the UK’s Tourism VAT rate – at double the European average – hurts tourism in Northern Ireland, making it more difficult for businesses to compete with other European destinations.  

Tourism is of vital importance to Northern Ireland amounting to 4.6% of our GDP and 60,000 people are currently employed in the Tourism and Hospitality Sector. As Northern Ireland showcases itself on a world stage through political events such as the G8, sports events such as the World Police and Fire Games or the Giro d’Italia, as well as through film and TV as the extremely successful Game of Thrones continues to be filmed at Belfast’s Titanic Studios, the Tourism industry also grows. This has led to a recent flurry of building and developing new tourist attractions such as the new Visitors Centre at the Giants Causeway, Titanic Belfast, SS Nomadic and the Crumlin Road Jail to name but a few.

Despite this, Northern Ireland has the lowest contribution from tourism to GDP in the whole of the British Isles. Local Industry also faces competitive pressure from the Republic of Ireland who have a VAT rate of just 9% and figures show that a reduction of VAT Tourism here would create 10,000 new jobs and contribute £1 billion to Northern Ireland’s economy. Not only would this secure future investment but it would also provide jobs for young people and this would certainly help towards alleviating youth unemployment. Unfortunately, Tourism VAT is not like Corporation Tax and EU law dictates that there cannot be varying rates in the same country, so this would need to be a UK wide reduction. The figures from other countries show just how crucial a cut could be to the UK economy – In the Republic of Ireland, the reduction led to a 16% increase of people visiting and a 19% spend increase. In France, a reduction created 28,000 new jobs.

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