May 04, 2012
A survey of over 200 members of the British Hospitality Association shows that an overwhelming majority support the industry’s campaign to reduce VAT to five per cent on hotel accommodation, attractions and for meals away-from-home
The survey marks the launch of new VAT pages on the BHA website – www.bha.org.uk giving updated developments on the campaign as well as a comprehensive series of questions and answers which explain the background to the campaign and its aims and objectives. A Facebook campaign is also being launched. Please visit HERE to join
The BHA’s survey reveals that members believe that the UK will gain a poor reputation for value for money if the government continues to keep VAT for the UK hospitality and attractions industry at 20 per cent and that this represents a severe barrier to growing their business.
Nearly 98 per cent say that the current VAT rate hinders the competitiveness of the UK hospitality and attractions industry; 85 per cent forecast that a reduction to five per cent would create new jobs and increase staff numbers; 90 per cent see business development opportunities following a VAT reduction.
Three-quarters (74 per cent) believe a reduction to five per cent will lead to more domestic visitors while over half (55 per cent) say it would lead to more overseas visitors. Three-quarters (76 per cent) say that a reduction in VAT will boost turnover.
Over 95 per cent will pass on all or some of the cut in VAT, if achieved, while 82 per cent will invest more in their product/facilities, 67 per cent will employ more people, 57 per cent will invest more in training; just under half (48 per cent) will increase staff wages.
Ufi Ibrahim, BHA’s chief executive, said that the research emphasised the benefits that would be brought about by a reduction in VAT for the hospitality industry.
“Experience in other countries shows that major changes in VAT rates are passed through to customers in their entirety,” she said. “It’s clear that our members plan to plough the saving achieved back into their business through lower prices, greater investment, more training and higher wages.
“These findings emphasise our belief that a reduction in VAT will boost customer demand. This will lead to the creation of more and more jobs – our research indicates that 78,000 jobs will be created following a reduction of VAT to five per cent. Of course, this will lead to greater revenues to the Treasury through higher tax returns.
“Reducing the VAT rate will also improve the UK’s international competitiveness, This country is only one of four out of the 27 EU member states which does not impose a lower rate of VAT on hospitality services. This makes the UK uncompetitive with the rest of Europe. We are effectively fighting the competition with one hand tied behind our back.
“We will continue to press home these arguments to government.”