Key Facts

  • A cut in the rate of VAT to 5% for visitor accommodation and attractions will make Britain competitive, create jobs and increase revenue.
  • Deloitte research has shown that a reduction in VAT on visitor accommodation and attractions could generate an extra 79,000 jobs – a large proportion of which will go to younger workers at a time when one in five 16-24 year olds is out of work.
  • A VAT cut would contribute an additional £2.6 billion to the Exchequer over the next decade.
  • The tourism industry alone directly employs 2.4m workers and a further 1.2m indirectly in support industries which supply hotels and restaurants.
  • Tourism is the UK’s third largest export industry, bringing in £17.7 billion each year in foreign exchange earnings.
  • The EU specifically permits a reduced rate of VAT for tourism because it knows that tourism is internationally competitive and a good creator of jobs but the UK is one of three countries out of the 27 in the EU who do use the reduction to help their tourism sector.
  • In a global tourism market, the current VAT rate undermines the UK’s ability to compete effectively. We now rank 135th out of 139 countries on price competitiveness.

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VAT factsheet

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