The lobby group – which is asking for a cut from 20% to 5% for visitor accommodation and attractions – will publish new research underlining the financial case for change. Many confused by the often complex EU rules on tax are unaware that VAT for hotels and attractions is one of a number of things that can be reduced without the need for a law change.
And operators including Bourne Leisure, Merlin Entertainment and the BHA are calling on the government to use a VAT cut to boost the sector – especially outside of London.
Boosting investment and jobs
Cutting the rate of VAT to 5% for accommodation and attractions would significantly boost investment and jobs, while helping the UK to be more competitive against EU states with lower rates of VAT.
Studies by Deloitte established in 2011 that a cut in VAT would create 80,000 jobs, and generate £2.6bn for the treasury over ten years. A separate study by Treasury adviser Professor Adam Blake, using the Governments own computer modeling, concluded in 2012 that cutting tourism VAT would add £4bn per annum to GDP, and is “one of the most efficient, if not the most efficient means of generating GDP gains at a low cost to the exchequer.”
Graham Wason, chairman of the CUT Tourism VAT campaign, said:
“The UK continues to have a thriving tourism sector, but potential growth is being hampered by the startling anti-competitive stance we have at the moment with such high levels of VAT relative to other EU states.”
MPs voiced their support in debate
Margaret Ritchie MP for South Down (SDLP) said:
“A cut in the rate of [Tourism] VAT would create demand, which would spur job creation and go some way towards reducing youth unemployment.”
Adrian Sanders, MP for Torbay (LD) said:
“South-west England has a great deal to offer, but when it is cheaper to visit just about any other country in Europe, how can we even start being the most competitive in the global race?”
Mike Weir, MP for Angus said (SNP):
“We need to give our tourism industries a boost and a chance to fight back, rather than asking them to fight with one hand tied behind their backs. “