Call for VAT to be lowered in tourism
A YORK MP has added his support to a motion bidding to bring UK VAT rates in line with the rest of Europe's tourism industry.
Hugh Bayley, MP for York Central, is one of 28 MPs to have signed a motion calling for VAT on hotels and attractions to be cut to 5 per cent.
The Early Day Motion (EDM) comes as growing numbers of politicians want to see Britain become more competitive compared with European countries which benefit from lower levels of tourism VAT, which the EU allows them to reduce.
The average rate of VAT applying to visitor accommodation in the EU is 10.8 per cent, which is just under half of the UK rate of 20 per cent.
The EDM was tabled by Margaret Ritchie, SDLP MP for South Down, who said: "Cutting VAT on hotels and attractions will enable the many towns reliant on tourism to grow faster and support the excellent work the sector already does employing young and low-skilled people.
“Ultimately, we are an island and in an increasingly global marketplace we cannot continue to price ourselves out of the equation.
"The high level of VAT at home also leaves us in the ridiculous situation where it’s cheaper for people in Northern Ireland and Britain to fly abroad – which is bad news for the environment, the economy and our balance of payments deficit.”
The EDM states that soon 25 of 27 EU member-states, including the Republic of Ireland, will be taking advantage of a reduced rate of VAT for tourism, and as a result many UK regions depending heavily on tourism suffer a "significant competitive disadvantage" against EU states.
The EDM calls on Government to introduce a sector-specific VAT reductions for tourism-related products, including accommodation and attractions.
Comments are closed on this article.