20 October 2014
Politicians from across the UK are urging the government to encourage growth in their constituencies by cutting VAT on tourism
Research using the Treasury’s own model commissioned in July showed cutting VAT on accommodation and attractions would create over 120,000 jobs, add £4 billion to UK GDP each year, and also contribute £4 billion to the Treasury over 10 years.
MPs and parliamentary candidates believe that coastal towns and villages have a central role to play in Britain’s ongoing recovery.
Britain’s high VAT rate compared to European countries makes it expensive for Brits to holiday at home. Tourism - currently Britain’s 6thlargest export, bringing £24 billion each year - is the only export where VAT is levied.
Britain’s VAT rate on accommodation and attractions is one of the highest in the EU, putting British tourism at a serious competitive disadvantage. Campaigners, including some of the biggest names in tourism, want to see the rate cut from 20% to 5% on accommodation and attractions in a bid to stir economic recovery in hard-pressed areas.
Peter Aldous, MP for Waveney, said:
“Seaside towns like Lowestoft, which I represent, continue to face a variety of economic challenges. Tourism is an extremely important local industry and a Tourism VAT cut would bring significant benefits, helping businesses to be more competitive and successful and to both secure and create new jobs. The UK is currently operating with one hand tied behind its back as the majority of European countries having more competitive rates. The economic case for a cut in Tourism VAT, using the Treasury’s own model has been proved and I urge the Government to consider carefully the compelling case which has been made.”
