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Cutting tourism VAT rate 'could give £25m annual boost'

By David Young

Published 02/12/2015

VAT on Northern Ireland’s tourist trade is currently 20%, while the rate in the Republic is just 9%
VAT on Northern Ireland’s tourist trade is currently 20%, while the rate in the Republic is just 9%

Cutting the Vat rate in Northern Ireland for tourism businesses could enable the sector to generate an extra £25m a year, a hospitality body will tell MPs today.

Hospitality Ulster said the reduction could also help create an extra 2,200 tourism-related jobs per annum. The organisation's chief executive, Colin Neill, will outline the bold predictions to a Westminster committee today.

The Northern Ireland Affairs Committee is conducting an inquiry into how the Government can support a sector facing stiff competition from the Republic of Ireland, where a lower rate of Vat is imposed.

MPs are exploring if the UK's 20% Vat rate is putting businesses at a competitive disadvantage.

The probe is examining the impact in other countries that have implemented a reduced rate in their tourism and hospitality sectors and what effect the Republic's 9% Vat rate on tourism had.

Ahead of his scheduled appearance before committee members at Westminster, Mr Neill said: "Currently 25 of 27 EU countries have reduced tourism Vat. The UK's current rate of 20% is almost twice the European average, which undermines competitiveness against countries with lower rates of Vat."

Belfast Telegraph

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