New Campaign research shows benefits of VAT reduction
The Campaign to Cut Tourism VAT has produced new figures showing the remarkable economic case for a reduction in VAT on tourism. The UK is one of only three European countries to not reap the benefits of a reduced rate of VAT for tourism, and at 20% has a rate almost double the European average.
The independent research shows that despite a first-year loss, by the third year a reduction would be revenue neutral and would result in a net profit for the Treasury thereafter. The gain for the Treasury would be £5.3 billion over ten years, produced by an industry free to grow to its full potential. The new data also shows that over the same period, expansion in the sector would provide an additional 130,000 jobs in the form of both direct and indirect employment. Furthermore, a reduction would improve the UK’s historically weak tourism trade balance by £24 billion over ten years.
These figures bolster the Campaign’s strong case for a reduction in VAT on accommodations and attractions in the UK, which is supported by over 150 MPs from across the Westminster parties and three select committees. A summary of the research can be found here.
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