Campaign Calls For Tourism VAT Cuts

VAT Cuts

Findings by the Cut Tourism VAT campaign reveals that the UK’s tourism industry would be significantly better off if VAT was reduced from 20 per cent to five per cent. Pic: VisitBritain.

Campaign Calls For Tourism VAT Cuts

Pressure is mounting on the government to cut VAT on UK tourism, after thousands of businesses and politicians signalled their support for a nationwide campaign.

The Cut Tourism VAT campaign believes the industry would be £4bn a year better off, and lead to the creation of up to 120,000 new jobs, if Britain fell into line with Europe and reduced the levy from 20 per cent to five per cent.

A cut in VAT would also increase the appeal to visitors from overseas already struggling with a strong pound, campaigners claim, helping the British tourist industry to compete with low-taxed European and American attractions.

Graham Wason, chairman of the Cut Tourism VAT Campaign, said: “This new research is the economic proof the Treasury has asked for to prove what every other country in Europe knows – that cutting VAT on holidays is profitable for governments.

“Many of our coastal towns are ignored but cutting VAT would help them thrive. More than 60 cross-party MPs have signed our parliamentary motion and more than 1,000 companies and groups are backing the campaign.”

Campaign supporter Dermot King, managing director of Bourne Leisure commented: “As the pound continues to strengthen against the Euro, the gap in price competitiveness between the UK and her European partners widens. Outside of the London bubble, UK tourism continues to try to compete with not just one but increasingly two arms tied behind its back.”

Tourism is one of the UK’s largest industries – employing over 3.1 million people and generating £127bn for GDP in 2013 – and campaigners say a cut in VAT would give a vital boost to regional businesses and economies reliant on the industry.

Ufi Ibrahim, chief executive of the British Hospitality Association said: “As the driving force behind our recovery, it’s vital we help smaller firms grow. No one denies the cut would dent tax revenues initially but only briefly, so this is a chance for politicians to prove they are really in it for the long by making an investment in an industry which is the UK’s biggest employer of young people.”