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Hospitality industry unites to support VAT cut for tourism

By Luke Nicholls , 12-Mar-2012
Last updated on 08-Oct-2012 at 11:49 GMT

Related topics: Business, Events & Awards, People, Legislation, VAT, Hotels

The British Hospitality Association, Travelodge and Whitbread are among a number of leading hospitality businesses and industry bodies that have united to urge the Government to slash the rate of VAT for the tourism sector to five per cent. 

Hospitality businesses and industry bodies have signed the letter to Chancellor George Osborne pressing for the reduced VAT rate

Hospitality businesses and industry bodies have signed the letter to Chancellor George Osborne pressing for the reduced VAT rate

To mark the start of English Tourism Week, the various hospitality and tourism businesses have signed a letter to Chancellor George Osborne, pressing for the reduced VAT rate ahead of the budget later this month.

“Tourism and hospitality is a great British success story,” said Nick Varney, chief executive of Merlin Entertainments – one of the letter’s signatories. “We offer accessible employment in difficult times, and securing this VAT cut will help provide young people with jobs when one in five 16-25 year olds are currently unemployed."

Thomas Dubaere, managing director of Accor UK and Ireland - another company to add its name to the letter - added: “A reduction in VAT will help our industry to prosper and continue to grow. The hospitality sector is one of the biggest employers in the UK and a  VAT cut would support its development in terms of network growth, job creation and investment in people.

"In turn, this boosts the economy and creates a skilled workforce which are steps in the right direction in the current climate.”

It is argued that lowering the rate from the current rate of 20 per cent would drive employment and tax revenue in the UK. Research by Deloitte has shown that a VAT cut would generate 79,000 jobs and contribute an additional £2.6bn to the Exchequer over the next decade.

Other leading figures and industry bodies that have signed the letter include: 

  • Alan Parker, president, British Hospitality Association
  • Ufi Ibrahim, chief executive, British Hospitality Association
  • John Cook, chief executive officer, Bourne Leisure Group Limited
  • Rhys Roberts, chairman, Best Western GB
  • Andy Harrison, chief executive, Whitbread
  • Simon Vincent, area president Europe, Hilton Worldwide
  • Thomas Dubaere, managing director, Accor UK and Ireland
  • Amanda Thompson, managing director, Blackpool Pleasure Beach
  • Jeremy Reed, chief executive, British Association of Leisure Parks, Piers and Attractions

Travelodge urges MPs

Meanwhile, budget hotel chain Travelodge has also called on MPs with large tourism sectors in their constituency to stand up for the industry in the House of Commons and enact the legislative reforms needed to help the sector grow.

Chief executive Guy Parsons has written to 50 MPs, urging them to use their position in the House of Commons to ask for:

  • The reduction in the rate of VAT to five per cent
  • An amendment in the Schengen Visa arrangements to make the UK an attractive destination for Chinese tourists.

“Despite being the fifth largest industry in Britain tourism is virtually neglected in the House of Commons,” said Parsons. “We are one of the few sectors of the economy that can quickly create meaningful jobs and help to pull the country out of its present difficulty.

“To truly be able to do this, we need MPs who will stand up and champion tourism’s cause. Reducing VAT to five per cent for tourism businesses and relaxing the Schengen Visa arrangements for Chinese tourists would send a message out that the Government is now firmly on our side.”

Last week, BigHospitality reported that Jaques Borel’s VAT Club has redesigned its logo to represent a new focus, emphasising the boost to jobs that the VAT cut could bring.

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