Cut Tourism VAT

Cut Tourism VAT

Cut Tourism VAT CampaignThe BHA demands of Government the initiatives which allow the UK to be more competitive internationally, including lobbying for deregulation, Cut Tourism VAT and improved visa policies.

The Cut Tourism VAT campaign calls for the rate of Tourism VAT to be brought in line with competitor destinations within the European Union. The UK is one of only four countries not taking advantage of a reduced rate.

Those enjoying a staycation, or international visitors coming to Britain pay almost three times as much VAT compared to a French or German destination, and twice as much as one in Italy and Spain.

Britain risks falling behind European rivals when it comes to attracting domestic and international holidaymakers. This is clear to see particularly in coastal areas where destinations struggle to attract tourists. Reducing tourism VAT would help lower prices, and let businesses invest.

This would in turn boost revenue to HM Treasury. Independent research carried out by a Treasury adviser using the Government’s own economic model has concluded that lowering the rate of tourism VAT to 5% is:

“one of the most efficient, if not the most efficient, means of generating GDP gains at low cost to the Exchequer that we have seen with the CGE model”.

Additional research by Deloitte/Tourism Respect found that such a reduction would contribute an extra £2.6 billion to HM Treasury over ten years and create 80,000 jobs.

Cut Tourism VAT enjoys a list of growing supportive MPs, MEPs and developed representatives, as well as BHA members such as Merlin Entertainment and Bourne Leisure - all supporting the cause locally and lobbying constituency MPs.

Dermot King, Director, Bourne Leisure:  “Nearly a million under-25s are unemployed in Britain.  How do we get them back to work?  It will be tourism and hospitality that will employ young people in seaside towns.  If we cut prices [by reducing tourism VAT to 5%], more people will come and we will employ more people to serve them.  It’s a huge opportunity being missed.”

Nick Varney, Chief Executive, Merlin Entertainments:  “Reducing the cost of accommodation and attractions by 15% will make UK tourism much more competitive.  More British people will be able to take an extra short break in the UK and we will also attract more foreign tourists.”

Dermot King, Director of Bourne Leisure:  “In terms of exports, tourism is worth more to the economy than car manufacturing – but you wouldn’t know it.  Almost every other country in Europe supports its domestic tourist industry.  Places like Clacton, Great Yarmouth, Hastings and Blackpool are starved of investment.  Businesses there can’t compete because they have to charge 20% tax versus their European competition.”