THE British Hospitality Association (BHA) has renewed calls for a reduction in tourism VAT across the UK after the Republic of Ireland government confirmed it will extend its reduced rate.
Delivering the Republic of Ireland’s Budget announcement earlier this month, finance minister Paschal Donohoe confirmed that the ROI’s temporarily lowered tourism VAT rate of 9% would be retained for another year.
BHA chief executive Ufi Ibrahim said the decision showed that the ROI government is “prioritising their tourism sector and creating a competitive environment where hospitality and tourism businesses are thriving”.
Urging the UK government to follow suit and cut VAT for the hospitality sector, Ibrahim said research for the Campaign to Cut Tourism VAT has shown that reducing tourism VAT to 5% across the UK would create 121,000 jobs, bring in £4.6 billion to the Treasury and improve the nation’s balance of trade by £23bn.
“Uncertainties relating to Brexit are a concern for our industry which is facing rising payroll costs, large business rates increases, unfair competition from the unregulated sharing economy and tourism VAT which is double the average European rate,” she said.
“The UK should follow the example of Ireland which has reduced tourism VAT twice and reaped the benefits.”
Fresh calls for a VAT cut come as a number of trade and drinks groups have issued pleas for a cut, or freeze, in duty in the government’s Autumn Budget on November 22.
Eight bodies, said to represent the entire supply chain in the UK’s beer and pub industry, have written a joint letter to chancellor Philip Hammond calling for “at least a freeze” in beer duty for the entire duration of this parliament, while the Wine & Spirit Trade Association (WSTA) has condemned a potential duty rise.