The minority Conservative government’s deal to gain support from the Democratic Unionist Party in Northern Ireland has triggered a call for a cut in VAT for UK tourism businesses.
Prime minister Theresa May yesterday pledged £1 billion in new taxpayers’ money to secure the support of the DUP’s ten MPs in Westminster on issues such as Brexit, budgets and national security.
British Hospitality Association chief executive Ufi Ibrahim said: “The UK government has recognised the need to examine how Northern Ireland’s businesses are impacted by the UK’s high rates of tourism VAT.
“Reducing tourism VAT across the UK is a key pillar of the BHA’s recommendations to government to support the UK’s fourth largest industry and we look forward to working with the Treasury and leading the industry’s representations to this detailed report.”
The UK’s tourism VAT rate at 20% is double the European average.
“Northern Ireland’s hospitality and tourism businesses risk losing customers to the Republic of Ireland where tourism VAT is 9%,” Ibrahim warned.
“We have been calling for a reduction in UK rate of tourism VAT to 5% to create 121,000 jobs, increase UK export earnings from tourism and bring in £4.6 billion to the Treasury over 10 years,” she added.
Northern Ireland has been pushing to cut or abolish Air Passenger Duty and tourism VAT to compete with Ireland but the agreement with the Conservatives does not yet commit to either.
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