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Cut tourism VAT to create 2,600 jobs across NI, lobby group urges Westminster

By Michael McHugh

Published 26/11/2015

The Cut Tourism VAT lobby group, which is supported by major hoteliers, gave evidence to a parliamentary inquiry probing how to promote the industry through the tax system
The Cut Tourism VAT lobby group, which is supported by major hoteliers, gave evidence to a parliamentary inquiry probing how to promote the industry through the tax system

Around 2,600 jobs could be created here by cutting tourism VAT, campaigners have claimed.

The Cut Tourism VAT lobby group, which is supported by major hoteliers, gave evidence to a parliamentary inquiry probing how to promote the industry through the tax system.

They said the sector was relatively underdeveloped and claimed many benefits could be gained from cutting the rate.

Economic adviser Graham Wason added: "Northern Ireland has the potential to gain well above average in terms of the UK.

"The case for reduced VAT in accommodation and attractions is highly compelling and will correct this disparity with the rest of the UK."

Mr Wason said a tax reduction would enhance competitiveness and claimed the Government could consider other areas permitted by EU rules where the reduction could be extended.

He added there was a compelling argument that sports events should enjoy a reduced rate.

Mr Wason admitted the figure of 2,600 jobs was not based on a detailed analysis of Northern Ireland tourist numbers or on a competitiveness study.

But he added that it had been calculated by taking the overall impact for the whole of the UK and apportioning that in accordance with what currently exists.

The Northern Ireland Affairs Committee of MPs is considering how the Government can support a sector facing stiff competition from the Republic, where a lower rate of VAT exists. It wants to explore whether the UK's 20% VAT rate is putting businesses at a competitive disadvantage, especially when compared with those in the Republic.

The inquiry will investigate the impact in countries that have implemented a reduced rate in their tourism and hospitality sectors and what effect the Republic's nine per cent level has had.

The Cut Tourism VAT organisation is UK-wide and supported by groups including Hilton Worldwide, Jurys Inn, Travelodge Hotels and Merlin Entertainments.

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

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