Governments must acknowledge sector’s importance
A REDUCTION in VAT on hospitality services, an immigration system which meets the needs of the sector in Scotland, an overhaul of the business rates system and shelving plans for a tourist tax are key steps both the UK and Scottish governments can take to support Scotland’s hospitality industry after what’s been described as another difficult year for the sector.
Trade groups say governments at Westminster and Holyrood must recognise the importance of Scotland’s hospitality industry and reflect that in policy decisions going forward.
The calls come as the industry is braced for further regulation, including the deposit return scheme (DRS), proposals to make calorie content on menus mandatory and a tourist tax.
Willie Macleod, executive director for Scotland at UK Hospitality, said political decisions “must take account of the ability of businesses to cope with these in terms of owner/manager capacity, the timing of implementation, the administrative changes which will be required and, importantly, the costs of compliance that will be imposed on businesses”.
“Hospitality and tourism are in the top tier of Scotland’s major indigenous industries; we’re important and government at Westminster and Holyrood, regardless of political persuasion, need to regard us as such, reflect our importance in policy decisions and not simply treat us as a cash cow,” he said.
“I’d hope that we will see the UK government taking the bold and potentially highly beneficial decision to reduce VAT on tourism and hospitality services to levels that are competitive with our European neighbours.
“We must have an immigration policy moving forward that fully takes account of the needs of the economy and labour-intensive sectors such as ours.
“Business rates will continue to dominate the UK Hospitality agenda as we move towards the 2022 revaluation … with the tone date on which valuations are based looming around the corner in April.
“[And] I might be living in a parallel universe, but I would urge the Scottish Government urgently to scrap all thought of a damaging tourist tax.”
Marc Crothall, chief executive of the Scottish Tourism Alliance (STA), said the Scottish and UK governments must “acknowledge and promote tourism as a force for good for all” and “have genuine appreciation of the industry challenges”.
“[We’d like to see] a continued commitment to work together with the industry to review and seek better and more suitably aligned, fairer taxation and policy that allows for tourism business growth and investment; minimise the burden of regulation and associated costs; [and] a reduction in VAT,” he said.
“Collaboration is key, now more than ever; it is this approach that will strengthen Scotland’s tourism industry to withstand the threats and challenges that the impending Brexit will no doubt bring with it.”
Colin Wilkinson, managing director of the Scottish Licensed Trade Association, said the trade “needs a break”.
“Overall there needs to be far less negative government intervention and interference,” he said.
“The licensed hospitality sector needs to operate on an equal footing with other business sectors and the rating system needs to be sorted once and for all.
“With Brexit now inevitable, a reduction in tourism VAT in the hospitality sector must be a priority for the UK government if the industry is to compete with EU countries and, in the case of Scotland, there is a greater urgency for this due to the introduction of a ‘bed tax’.”
Emma McClarkin, chief executive of the Scottish Beer & Pub Association (SBPA), said business rates continue to “weigh heavily on the sector”.
“With pubs paying 2.8% of the entire business rates bill, despite accounting for just 0.5% of total business turnover, rates continue to be a key focus of our work,” she said.
