A high profile campaign is being launched to cut VAT on hotel accommodation and tourist attractions from 20% to 5% in a bid to support the UK’s regions.
MPs from all parties are backing the push, as well support from The Sun.
The newspaper today launches a Give Us A Break campaign highlighting the issue which the tourism industry believes could create more than 120,000 new jobs.
A cut in VAT would make domestic holidays cheaper and the UK tourism industry more competitive internationally – in the face of the strengthening pound pushing people to head abroad.
Thousands of supporters range from industry bodies such as the British Hospitality Association to small B&Bs, family run attractions, zoos and major international brands.
France and Spain charge 10% tax on staying in hotels and holiday parks, while VAT in Germans hotels is just 7%.
As a result, a one-week family holiday in a mobile home in a holiday park in south-west France costs nearly £150 less than an identical holiday in Bognor Regis, campaigners claim.
Britain is only one of four European countries to not have cut holiday taxes – and one of them, Lithuania is cutting its VAT next year.
While the government charges holidaymakers 20% VAT, countries like Portugal, Holland and Belgium levy just 6% tax on all hotels, holiday camps and tourist attractions.
Graham Wason, Chairman of the Cut Tourism VAT campaign, said: “This campaign is about more than just tourism – it’s about the people, communities and jobs driven by it right across the country.
“Ministers need to take a long term view and it’s clear that cutting VAT will offer a vital lift to many areas that have been forgotten for far too long.”
BHA chief executive Ufi Ibrahim said: “This is about helping put British firms on a level playing with Europe and enabling them to invest more in communities, create more jobs and offer lower prices.
“Currently, we incentivise people to travel abroad – something amplified by the strengthening pound. As an island, it’s no wonder so many regions depend on the sector and we hope Mr Osborne will give us all a break in his next Budget.”
Butlins managing director Dermot King said: “We need to recognise that tourism isn’t just the country’s biggest employer of young people or the social heart of hundreds of towns, but the economic driver of many British regions.
“This is about investing in the future of those areas – where hotels and attractions are potentially the lifeblood of economic recovery – so that our improving business climate can benefit everyone and not just the south-east.”
Nick Varney, chief executive of theme park operator Merlin Entertainments, said: “We have a fantastic tourism product in this country, with the most beautiful countryside, beaches, landscapes and premier league attractions.
“There are also really good accommodation providers out there from superb hotels to brilliant B&Bs. Let’s try and give them a break and do something good for the economy.”
Torridge and West Devon Conservative MP Geoffrey Cox added: “It is going to send an electric shock of aid and assistance and support for the domestic tourism industry. That’s what we need to do, it’s a vital industry for the south-west and that’s why I am urging the government to take action.”
Accor UK & Ireland managing director Thomas Dubaere said: “While the UK is a highly desirable destination for tourists, the current rate of VAT, which is double the European average, discourages a large number of potential visitors and prevents the industry from achieving its true potential.
“A cut in the rate of VAT for tourists would bring significant benefits for thousands of hospitality related businesses across the entire country, create much needed jobs and be a major boost for the wider British economy.”