Slash tourism VAT to kick-start rural economy, says rural business group

CLA East regional director Cath Crowther has urged ministers to cut VAT on tourism businesses to hel

CLA East regional director Cath Crowther has urged ministers to cut VAT on tourism businesses to help kick-start the rural economy after the coronavirus lockdown. Picture: Sonya Duncan - Credit: Sonya Duncan

VAT on tourism businesses should be cut to 5pc to help the rural economy recover from the coronavirus crisis, said East Anglia’s countryside business leaders.

The idea is one of a raft of suggestions made by the Country Land and Business Association (CLA) to help the economy recover from the severe financial impacts of the Covid-19 pandemic.

CLA East regional director Cath Crowther said: “Rural tourism businesses will see revenues fall by up to £17.6bn this year. It is right that, for the moment, people stay away and follow government guidelines. When the restrictions are lifted we are encouraging everyone to book their family holiday in the beauty and safety of the British landscape.

“In the UK VAT on tourism businesses, at 20pc, is far higher than in many other countries, including France (10pc), Spain (10pc) and Greece (13pc).

“A reduction in VAT to levels seen in other countries will ensure that domestic tourism is competitive and affordable. Competitive pricing will significantly boost the economy and keep our carbon footprint down.”

READ MORE: MPs ‘missed opportunity’ to secure vital safeguards for food standards, say farming leadersThe CLA published a paper named “Covid-19: Restarting the economy in rural areas” this week arguing that rural areas have an “in-built advantage to implement social distancing thanks to lower population density, more space and less reliance on public transport”.

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Other suggested measures include:

• The tapering of furloughing schemes and other business support measures slowly to avoid a “cliff edge”.

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• Taking measures to create “a more robust food supply chain, including efforts to ensure consumers buy British and buy local”.

• Simplifying the planning system to encourage business start-ups in the rural economy, and greater flexibility to the use of buildings (for example, converting into homes).

Ms Crowther added: “Although the current situation is very difficult for rural businesses there is also an opportunity to reflect and then to build a better rural economy on a sounder competitive basis.

“The rural economy has a huge amount to offer the country – economically, socially and environmentally. Government can show some real ambition in unleashing its potential.”

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