Fresh calls for cut to VAT on tourism
08:35 11 February 2014
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Further pressure will be heaped on the government to cut tourism VAT as the region’s leaders said they felt “under threat” from European competitors.
Ministers will be forced to answer concerns about European countries such as France and Spain, where attractions and businesses like bed and breakfasts benefit from a reduced tax.
In a debate in the House of Commons today MPs will urge the government to follow the lead with British holiday makers paying almost three times as much VAT compared to a French or German break, and twice as much as one in Italy and Spain.
Martin Dupee, chairman of the Norfolk Tourist Attractions Associations, said research showed the Treasury would benefit from extra investment, jobs and the associated tax and businesses rates. “It is a no risk case for the Treausry, but it seems to be political.
“They think if one sector is saying there is a case to answer, others will want the same.” He also said that investment in the region would be encouraged. In the 2013 Larking Gowen Tourism Business Survey, 89pc of respondents said they saw the lower VAT rate in Europe as a threat.
Chris Scargill, specialist tourism partner at the accountancy firm, said that even if the government did not feel it could go as far as the other European countries, restaurants, accommodation and attractions would be given a boost if they could see some reduction.
“I think for a number of businesses it would be a dream come true to have any changes in this budget, rather than simply highlighted for the future. It will help people in the UK and encourage more travel from Europe. It will help create a feelgood factor, because we all like to go out.”
Michael Timewell, chairman of Visit North Norfolk and a director of Blue Sky Leisure, said it was encouraging that the first ever debate in parliament focusing solely on VAT for tourism businesses was taking place.
“A VAT reduction will help generate growth in Norfolk tourism, create jobs and boost the economy,” he said. Andy Wood, Chairman of New Anglia LEP said: “Tourism is a very important sector, which contributes £4.5bn each year to the Norfolk and Suffolk economy. We’d very much welcome a VAT cut for tourist businesses.
“Many tourism businesses are small businesses, often working within a really tight profit margin.”
Should VAT be cut? Write (giving your full contact details) to: The Letters Editor, EDP, Prospect House, Rouen Road, Norwich NR1 1RE, or email EDPLetters@archant.co.uk