Ufi Ibrahim Chief Executive of the British Hospitality Association joined by Chief Executive Pubs of Ulster together with MPs Gregory Campbell, Jim Shannon and Ian Paisley Jnr posted a Valentine’s Day card to the Chancellor at Downing Street, calling for a reduction on VAT rates for businesses in the tourism sector in Northern Ireland.
Pubs of Ulster, which represents pubs, bars, café bars, hotels and restaurants in Northern Ireland, is supporting the BHA led ‘Cut Tourism VAT’ campaign that calls for a reduction in the VAT rate to support businesses in that sector and boost an industry which is struggling in the current economic climate.
Tourism in Northern Ireland is worth over £720 million to the local economy, and is responsible for 43,000 jobs. With such a high VAT rate - particularly in comparison with that in the Republic of Ireland – the issue of competitiveness is a huge concern.
Since the Republic reduced its VAT rate to 9%, the tourism industry has seen 6,000 new jobs created. A similar reduction in Northern Ireland could result in as many as 3,300 new jobs.
Independent research, using HM Treasury’s own economic model, has shown that a VAT cut would have massive benefits, driving the economy by £4 billion in new revenue into the UK.
Gregory Campbell MP said: “It is exceptionally difficult for businesses in Northern Ireland with a VAT rate of 20% to compete with pubs, hotels and restaurants in the Republic who benefit from a VAT rate that has been reduced to 9%.
“This gives the Republic of Ireland a competitive advantage over Northern Ireland and has succeeded in attracting more foreign visitors and increasing domestic tourism. I have been lobbying the UK Government to grant us a similar reduction and will continue to do so, to ensure that Northern Ireland can compete on a level footing.”
Chief Executive of Pubs of Ulster Colin Neill said: “We are calling on the Chancellor to cut VAT rates for businesses in the tourism sector and put us on an even footing with the majority of European countries which have introduced VAT reductions for the tourism sector in recent years to promote tourism, and to protect and nurture jobs.
“Northern Ireland is at a huge disadvantage because our rate remains high, whilst the Republic of Ireland has reduced the rate in its own tourism sector to 9%. This gives businesses there a significant advantage over NI businesses and means we are always struggling to compete on a level footing.”