Tourism industry bosses in Britain have written to Chancellor of the Exchequer George Osborne before his autumn statement to demand a drop in VAT to boost exports and reduce the trade deficit.
Recent number crunching on tourism VAT using the HM Treasury’s own economic model found a VAT drop for accommodation and attractions wold contribute an extra GBP4 billion a year to the UK economy.
This would predominantly benefit those who chose to holiday or take day trips in the UK, with UK companies often losing out to cheaper European rivals.
“The Government is currently promoting its export credentials but has failed to recognise that tourism is an export sector. It has loaded tourism with taxes, such as VAT, and increased other barriers to a point where we are now losing market share to our rivals,” said Nick Varney, chief executive of Merlin Entertainments, which runs some of the top theme park and attractions in the UK. “Price competitiveness is the single biggest obstacle to more international visits and more people holidaying in the UK. A reduction in VAT on tourism would go a long way to improve our international standing and help ease the cost of living burden for staycationers.”
The letter and campaign represents more than 3,500 companies in the hospitality sector and more than 40 national and regional associations.
Graham Wilson, chairman of the Cut Tourism VAT campaign added: “A significant prize in terms of growth and employment will be won by the Government which reduces Tourism VAT. In addition the Chancellor will be known as the politician who finally gave British families the opportunity to enjoy UK holidays taxed at a competitive rate with holidays abroad – a level playing field with mainland Europe at last.”
Osborne will make his autumn statement on 5 December.