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Cut to hospitality industry's Vat rate could create over 2,000 jobs, tourism study claims

By Michael McHugh

More than 2,000 jobs could be created if the Vat rate on hotels and visitor attractions in Northern Ireland is cut to 5%, a report for the tourism industry has shown.

Hospitality businesses pay VAT at a rate of 20% - more than twice that of competitors in the Republic of Ireland.

EU law prevents member states from setting different levels of the charge for different regions. That power will be repatriated to the UK after Brexit and the DUP is pressing for a speedy cut.

Colin Neill, chief executive of Hospitality Ulster, said: "It really is about being competitive.

"At the minute we are uncompetitive in the European market."

Howard Hastings, managing director of Hastings Hotels, said currency fluctuations between sterling and the euro are not grounds for long-term business decisions.

"Vat is structural and would kick-start our tourism economy and these numbers understate the potential for delivery of more accommodation into Northern Ireland and the delivery of upstream benefits," he said.

The study, carried out by Nevin Associates, is the first to look at Northern Ireland statistics separately from the rest of the UK.

A cut in the VAT rate for visitor accommodation and attractions would reduce Treasury income by £4.2m in the first year.

However, over a five-year period the Exchequer would gain by £32m, rising to £109m over a decade, it said.

Tourism-related businesses in Northern Ireland pay 20% VAT, compared with 9% by their counterparts in the Republic.

Belfast Telegraph

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