MPs renew calls for reduction in tourism VAT

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A group of MPs have tabled an Early Day Motion in Parliament, renewing calls for the chancellor to reduce Tourism VAT to five percent.

 

Stephen Lloyd, Liberal Democrat MP for Eastbourne in East Sussex, tabled the motion, which has been co-sponsored by several other MPs including Caroline Lucas, Jim Shannon, Sammy Wilson, and Dr Philippa Whitford.

Speaking about the motion, Lloyd said: “The tourism industry lies at the heart of the British economy. But what the UK visitor economy urgently needs is to become more competitive relative to its European counterparts.

“That means reducing the damagingly high rate of VAT on tourism. I call upon my fellow MPs to sign the Early Day Motion and oppose the imposition of yet another tax on the hospitality industry.”

Around 33 countries in Europe have a reduced rate of VAT on tourism. The UK charges 20 percent on VAT for visitor accommodation, significantly more than Germany, Ireland, Spain and Italy. The Campaign to Cut Tourism VAT is calling for VAT in the UK to be reduced to 5 percent on accommodation and attractions.

Vernon Hunte, campaign manager of the Campaign to Cut Tourism VAT, said: “I welcome Stephen Lloyd’s Early Day Motion and for his commitment to celebrating Britain’s tourism and hospitality sector, as the UK’s fourth largest industry.

“Independent research has shown that a reduction in the rate of tourism VAT to 5 percent would stimulate investment and spending in the hospitality industry across the UK, contributing £4.6bn to the Exchequer.”

One reason countries are allowed to reduce their rate under EU law is a study from Copenhagen Economics, in response to a question from the European Commission, which showed a reduction in Tourism VAT giving a 95 percent pass-through to the consumer in three years.

The freeing up of this money could incentivise people to holiday in the UK, with the knock-on effects being highly beneficial to operators across the country.


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