Should there be a reduced rate of VAT for tourism related businesses?


Tourism and business leaders in our region are calling for the Government to get in line with other EU countries and drastically cut the rate of VAT on the tourism industry.


They argue that although every business sector would get a boost from a general cut in VAT, a new rate of 5% for the tourism industry will attract more visitors and incentivise tourism related businesses to invest.


Tourism is one of the most significant segments of the local economy and our region is therefore disproportionately affected by this uncompetitive tax rate. With some signs of weakening consumer demand, the sector and the region are amongst the worst affected by current austerity measures and decreasing disposable income.


There are currently 21 countries in the EU with a lower VAT rate for the hotel sector and 13 for the overall hospitality sector.  A reduction in the rate of VAT in France for tourism related activities is reported to have led to the creation of 21,700 jobs and many argue that reducing the rate of VAT would actually increase the overall tax take for the exchequer.


The British Hospitality Association is one of the groups that are lobbying Government on this topic and further information, including details of how to add your views and support for the change can be found by following the  link.


Reduce the rate of VAT to 5% | British Hospitality Association