Third parliamentary select committee calls for reducing Tourism VAT
A third major parliamentary select committee has come out in favour of reducing tourism VAT. The recommendation by the Northern Ireland Affairs Committee in Westminster, is another massive step in moves to make the UK tourism industry on a level playing field with its European counterparts.
Dermot King, MD of Butlins and Chairman of the Campaign to Cut Tourism VAT, said:
“There is now deafening support from across the UK and the political spectrum for the government to recognise the distinct needs of the hospitality and tourism sector. The UK is at a major competitive disadvantage to European competitors, ranking 140th out of 141 on world price competitiveness. A reduction in tourism VAT could be brought into effect immediately, as there is no need for legislation at the national or EU level.”
Mr King continued “I’ve already called on the government to reduce tourism VAT during school holidays to test our conviction that cutting this tax would help businesses and the public and in the long term the Treasury.”
The Cut Tourism VAT Campaign already has the support of 171 MP across all parties and has secured recommendations from the Culture, Media and Sport Committee and the Welsh Affairs Committee.
Eddie McKeever of McKeever Hotels Group who operates both in Northern Ireland (Tourism VAT at 20%) as well as the Republic of Ireland (Tourism VAT at 9%) said:
“As a family business that operates on both sides of the border I’ve been surprised at the difference it makes. The 11% VAT gap between Northern Ireland and the Republic of Ireland has benefitted my business and guests in the Republic. As a result, I’ve been able to secure more jobs than initially forecasted and has created further jobs in the local community. I hope the UK Government will now understand the benefit and opportunities of reducing tourism VAT. “
The hospitality and tourism industry is the fourth largest industry in the UK, supporting 4.5 million jobs and contributing 10% of UK GDP. Yet, on top of one of the highest VAT rates on tourism in Europe, the industry is grappling with rapid increases in its cost base and the prospect of severe labour shortages as a result of Brexit.
Margaret Ritchie MP, Co-chair of the APPG for the Visitor Economy said:
“People love coming to Northern Ireland and tourism is vital for our economy, but we need to let our great tourism businesses compete on a level playing field, without tying one hand behind their back. That’s why the Northern Ireland Affairs Committee was pleased to add its weight to the call for a reduced rated of Tourism VAT which will be a real boost to the local and national economy.”
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