March 22, 2012
While many of the measures in the Budget are to be welcomed, the Chancellor has missed an opportunity to create more jobs by making Britain’s hospitality and tourism industry competitive with other European countries, says Martin Couchman, deputy chief executive, British Hospitality Association.
“The Chancellor said that he wanted Britain to have a tax system that is more competitive for business than any other major economy in the world, but Britain has the third highest VAT tax rate on hotel accommodation in Europe.
“We are continuing to compete with countries like France and Germany which charge seven per cent on hotel accommodation, Spain which charges eight per cent and Italy which charges 10 per cent. Of all the 27 EU member states only Denmark and Lithuania charge a higher rate.”
Mr Couchman said that the BHA would continue to lobby for a reduction to five per cent of VAT on hotel accommodation and attractions so that the industry could operate on an equal footing with European competitor countries. In doing so, it could create more jobs at a critically important time.
“Until we do, hospitality and tourism, which is Britain’s fifth biggest industry will be unable to realise its full potential, create more jobs and help fulfill the Chancellor’s aim.”
He said that other Budget measures were helpful, including the reduction of Corporation Tax and the simplification of tax returns for micro businesses such as Guest Houses and B&Bs.
“Altogether, if the Budget achieves the Chancellor’s aim to get Britain moving, then this is to be welcomed, but tourism and hospitality could make a much bigger contribution to this objective if he had listened to our arguments on the reduction of VAT.”
Wordsmith and Company