With renewed sovereignty comes renewed opportunity to reduce Tourism VAT

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Looking at the UK’s potential to exercise renewed sovereignty once untied from EU regulation, CEO of BALPPA Paul Kelly identifies a wider range of options for Tourism VAT reduction as a new opportunity in post-Brexit Britain. Now the government has to grasp it.


Britain will have a wider scope on reducing Tourism VAT following Brexit’s completion,with the country set to be free from EU regulation which sets out only two possible options for its members.

Currently the“choices are only 20 percent or five percent,” explained BALPPA chief executive Paul Kelly, adding that “European rules have prevented the government from taking something in between”.

While Kelly has been backing the Cut Tourism VAT campaign headed by Butlins managing director Dermot King – which has been pushing for a 5 percent rate,he believes the loss of EU limitations opens up the opportunity for a more nuanced debate about the viability of other options.

“Some places in Europe have ten,11 or 18 percent – we could never adopt those under EU rules, but soon we can,” said Kelly.

“If the government were stronger, now would be the time to have a serious look at reducing the rate. We could actually set the level ourselves around what would be the best rate for both the industry and future investment.”

There has been suggestions from the Cut Tourism VAT campaign that the government doesn’t take tourism seriously enough, with King calling for tourism to have its own minister in October last year.

Kelly agreed that it would be “nice to have a minister that backs tourism, and a government that looks at all the evidence”, which includes the fact that tourism contributes to the UK as the 5th largest industry, with further growth on the horizon.

“People have made a conscious choice over the last several years to spend more time in the UK,” he continued.

“More attractions are investing in accommodation and creating resorts.There are more visits to attractions for two to three days where people are staying over, and I think that’s now the trend. Any attraction of a significant size has put in accommodation,or they’ve put in planning for it.”

With this in mind, Kelly concluded that the government should look at “leveling the playing field with the rest of the Europe”, and by doing so, back an industry that Britain does best.

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