• Campaign growing for reduction of VAT to 5% for tourism industry

    24th June 2014 | News | Claire
  • MPs and business leaders in the Westcountry are backing a national campaign to reduce the rate of VAT for the tourism industry.

    Campaigners want to see the current 20% rate slashed, and have backed the CUT Tourism VAT Campaign, which is lobbying for a reduction to 5%.

    A cross-party group of 28 MPs from across the country have signed an Early Day Motion (EDM) calling on the government to reduce the rate of VAT on the tourism industry, in order to boost regional economies outside London. This comes as growing numbers of politicians want to see Britain become more competitive compared with European countries who benefit from almost universally lower levels of tourism VAT, which the EU allows them to reduce.

    Adam Fox-Edwards, managing director of the Arundell Arms, a hotel in Lifton, near Okehampton, employs 20 full-time staff and 30 part-time staff.

    He said: “The industry will respond very quickly – a cut will bring on more people staying in hotel rooms, more people therefore eating in restaurants, bars, pubs and so on.

    “Hopefully more overseas visitors will be coming inbound, and fewer of the UK citizens going outbound – so it’d be very good for our local economy.”

    Supporters want the UK tourism industry to be able to compete on a level playing field with Europe, where 24 out of 27 countries already have reduced rates of VAT.

    They say the average rate of VAT applying to visitor accommodation in the EU is 10.8%, just under half of the UK rate (20%).

    The UK rate is also nearly a third higher than the current European average of 15.7% on attractions.

    As a result, UK residents spend more in tax on domestic holidays than their European counterparts.

    In France the government levies just a 10% VAT rate on accommodation and admissions. Meanwhile in Ireland, the rate goes down to just 9%.

    Geoffrey Cox, Tory MP for Torridge and West Devon, whose constituency includes Lifton, said: “It is going to send an electric shock of aid and assistance and support for the domestic tourism industry.

    “That’s what we need to do, it’s a vital industry for the South West and that’s why I am urging the government to take action.”

    In a recent House of Lords debate Labour peer Lord Harrison said the government does not ‘get’ tourism.

    Plymouth city councillor for Labour Bill Stevens, said: “In a city like Plymouth… the largest city on the south coast, we rely heavily on tourism.

    “We have something in the region of five million expected visitors, and growing support for the tourism industry is vital.

    “If we can do anything to help hoteliers and people involved in the tourism industry,that would be fantastic.”

    Here’s the debate that took place at EDDC in April – http://www.claire-wright.org/index.php/post/motion_on_cutting_tourism_vat_is_headline_grabbing_soundbites