DUP deal: Government to commission report on Tourism VAT in Northern Ireland
Today it was announced that as part of the Conservative-DUP deal, a detailed consultative report will be commissioned into the impact of Tourism VAT on Northern Ireland.
VAT on tourism was a key issue in the negotiations. The Republic of Ireland currently enjoys a 9% Tourism VAT rate, compared to a rate of 20% in Northern Ireland and the rest of the UK.
Across Europe 33 countries have a reduced rate of VAT on tourism. The UK has a Tourism VAT rate three times that of Germany or Greece, and twice that of Spain, France and Italy.
Tourism is a vital industry in Northern Ireland offering high numbers of entry-level positions, providing skills training particularly for young people and leading the way in enabling diversity.
In response to the announcement, Dermot King, Chairman of the Campaign to Cut Tourism VAT, says:
“The commitment to consult on the impact of Tourism VAT in the DUP-Conservative deal shows the importance of the growing and successful hospitality and tourism sector to the economies of Northern Ireland and the entire United Kingdom.
I am confident the findings of this consultation will show that Tourism VAT should be reduced to 5% across every part of the UK, creating 121,000 jobs, increasing UK export earnings from tourism and bringing in £4.6bn to the Treasury over 10 years. The benefits would be felt most keenly in coastal and rural areas in need of regeneration. We look forward to submitting our extensive research to the government outlining the positive impacts of a reduction.”
Ufi Ibrahim, Chief Executive of the British Hospitality Association said:
“The government has recognised the need to examine how Northern Ireland’s businesses are impacted by the UK’s high rates of Tourism VAT. Reducing Tourism VAT across the UK is a key pillar of the BHA’s recommendations to government to support the UK’s fourth largest industry and we look forward to working with the Treasury and leading the industry’s representations to this detailed report.
The UK’s Tourism VAT rate at 20% is double the European average. Northern Ireland’s hospitality and tourism businesses risk losing customers to the Republic of Ireland where Tourism VAT is 9%.
We have been calling for a reduction in UK rate of Tourism VAT to 5% to create 121,000 jobs, increase UK export earnings from tourism and bring in £4.6bn to the Treasury over 10 years.”
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