May 04, 2012
In a survey, BHA Members were asked ten questions which looked at the sectors they operate in and their view of the future with or without a reduction in VAT to five per cent.
Over 200 members responded, showing showed that they felt very strongly that the UK would gain a poor reputation for value for money if the government continued to keep VAT for the UK tourism and hospitality industry at 20 per cent. This this represented a severe barrier to growing their business.
Nearly 98 per cent said that the current VAT rate hindered the competitiveness of the UK tourism and hospitality industry and nearly 85 per cent said that a reduction to five per cent would create new jobs and increase staff numbers. Ninety per cent could see business development opportunities following a VAT reduction.
Three-quarters (74 per cent) believed it would lead to more domestic visitors while over half (55 per cent) thought a reduction would lead to more overseas visitors. Three-quarters (76 per cent) forecast a reduction in VAT would boost turnover.
Encouragingly, over 25 per cent said that if a five per cent VAT rate were achieved all of it would be passed on. A further 70 per cent said they would pass some of it on. Of the latter, 82 per cent said they would invest more in their product/facilities, 67 per cent would employ more people, 57 per cent would invest more in training. Just under half (48 per cent) would increase staff wages.