Could MPs scrap tourism tax in Northern Ireland?

By Sophie Witts contact

- Last updated on GMT

Belfast:Thinkstock/Nigel Andrews
Belfast:Thinkstock/Nigel Andrews

Related tags: Northern ireland, Republic of ireland

MPs have launched an inquiry in to whether Northern Irish hospitality businesses are being damaged by the UK's tourism tax.

The industry is worth over £750m to the local economy and is responsible for 43,000 jobs.

But there are concerns that the UK’s 20 per cent VAT rate is putting businesses at a competitive disadvantage compared to the Republic of Ireland’s nine per cent rate.

Janice Gault, chief executive of the Northern Ireland Hotels Federation (NIHF), told BigHospitality that hotels in the region faced ‘an exceptionally difficult’ trading climate.

“Five out of six counties in Northern Ireland share a border with the Republic of Ireland and for businesses in these locations there are additional pressures,” said Gault.

“Ireland is marketed as a single island destination overseas by Tourism Ireland.

“The 11 per cent difference in VAT presents a real challenge in terms of competitiveness when selling Northern Ireland as part of an all island offering.”

NIHF research estimates that failing to reduce the rate tourism tax could cost the Northern Irish economy £132m by 2020.

The group has welcomed the parliamentary enquiry as a chance for a coalition including the NIHF, the British Hospitality Association (BHA) and the Cut Tourism VAT campaign to present its case.

Laurence Robertson MP, chair of the Northern Ireland Affairs Committee, said: "The tourism and hospitality industry has a vital role to play in growing the Northern Irish economy and we are keen to find out how, through the tax system, HM Government can better support hotels, restaurants and other businesses to attract visitors.”

Businesses in Northern Ireland are also hit hard by air passenger duty, which is currently zero for the Republic of Ireland but £13 from Northern Ireland for short haul flights. 

The inquiry is open to submissions until 11 December, for more information see here.

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