Give Us A Break: New campaign to cut tourism VAT

By Carina Perkins contact

- Last updated on GMT

Related tags: Cut tourism vat, United kingdom, England, Uk

Campaigners argue a cut in tourism VAT would result in a boost to the British economy and 120,000 extra jobs
Campaigners argue a cut in tourism VAT would result in a boost to the British economy and 120,000 extra jobs
The Sun newspaper has launched a campaign calling on Chancellor George Osborne to cut VAT on hotel accommodation and attractions to 5 per cent.

Starting today, the newspaper's ‘Give Us A Break’ campaign will highlight the industry's Cut Tourism VAT campaign, with editorial explaining why a cut would benefit Britain.

Campaigners claim British tourism is currently running at a £17bn deficit because five British people go abroad on holiday for every two inbound foreign visitors.

They argue that a 5 per cent cut in tourism VAT would make Britain more attractive to foreign visitors, generating enough additional business to create 120,000 new jobs.

Tourism VAT

Under EU laws, member states are permitted to reduce VAT rates for a limited number of services and industries, including tourism.

Britain is now only one of four European countries that has not cut tourism VAT, putting British tourism at a competitive disadvantage.

Portugal, Holland and Belgium levy just 6 per cent tax on hotels and tourist attractions, for example, while France and Spain charge 10 per cent VAT tax for hotels and holiday parks and VAT in German hotels is 7 per cent.

At a Parliamentary debate earlier this year, the Treasury rejected a cut in tourism VAT​ on the basis that it would be too expensive and put the government’s ‘economic credibility and long-term economic plan at risk’.

However, campaigners argue that the VAT cut would actually boost the British economy by increasing foreign spend and creating new jobs.

Every jumbo jet that arrives in the UK from China, for example, equates to an additional £1m in tourism spend, creating 20 full time jobs and generating £200,000 additional funds for the Exchequer.

Level playing field

Supporters of the Cut Tourism VAT campaign include industry bodies such as the British Hospitality Association (BHA) and The British Association of Leisure Parks, Piers and Attractions (BALPPA), as well as independent hotels and international brands

BHA Ufi Ibrahim said: “This is about helping put British firms on a level playing with Europe and enabling them to invest more in communities, create more jobs and offer lower prices.

“Currently, we incentivise people to travel abroad – something amplified by the strengthening pound. As an island, it’s no wonder so many regions depend on the sector and we hope Mr Osborne will give us all a break in his next Budget.”

Thomas Dubaere, managing director of Accor UK & Ireland, added: “While the UK is a highly desirable destination for tourists, the current rate of VAT, which is double the European average, discourages a large number of potential visitors and prevents the industry from achieving its true potential.

"A cut in the rate of VAT for tourists would bring significant benefits for thousands of hospitality related businesses across the entire country, create much needed jobs and be a major boost for the wider British economy.”

Key benefits of cutting VAT on accommodation and attractions:
  • 120,000 jobs around the UK
  • Making Britain more competitive against European neighbours
  • Encouraging economic growth, investment and jobs outside of London
  • A 4/5bn gain to the exchequer over 10 years
  • A gain of 4.1bn annually to UK GDP

Related topics: Business & Legislation, People, Hotel

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