BHA responds to ROI Finance Minister announcement on the Tourism VAT rate

At the Republic of Ireland’s Budget announcement on 10th October, Finance Minister Paschal Donohoe declared tourism a “national success story” and decided to retain the temporary lower Tourism VAT rate of 9% for another year. Mr Donohoe said that the decision was influenced by uncertainties relating to Brexit and the weak pound in relation to the Euro. The UK is Ireland’s largest single tourism market.

In response to the news Ufi Ibrahim said:

“The BHA congratulates the Republic of Ireland government for prioritising their tourism sector and creating a competitive environment where hospitality and tourism businesses are thriving.
UK hospitality is a domestic facing industry with UK household spend accounting for 88% of the industry GVA, with only 12% coming from foreign visitors. Domestic tourism is down 3% this year already. Uncertainties relating to Brexit are a concern for our industry which is facing rising payroll costs, large business rates increases, unfair competition from the unregulated sharing economy and Tourism VAT which is double the average European rate.

The UK should follow the example of Ireland which has reduced Tourism VAT twice and reaped the benefits. Research for the Campaign to Cut Tourism VAT shows that a reduction to 5% Tourism VAT would create 121,000 jobs, bring in £4.6bn to the Treasury and improve the UK’s balance of trade by £23bn.”

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