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Third parliamentary select committee calls for tourism VAT cut

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Third parliamentary select committee calls for tourism VAT cut

A third parliamentary select committee has indicated that it is in favour of reducing tourism VAT.

The Northern Ireland Affairs Committe in Westminster made the recommendation after it heard from representatives of the tourism sector in Northern Ireland about their concerns for the future of the land border with the Republic of Ireland following Brexit, and the impact they believe any changes would have on their industry.

Among those to speak at the hearing were: Shane Clarke, director of corporate services and policy, Tourism Ireland; Paul Cullen, head of IT and business systems, CIE Tours International; Janice Gault, chief executive, Northern Ireland Hotels Federation; and Colin Neill, chief executive, Hospitality Ulster.

The Cut Tourism VAT Campaign already has the support of 171 MP across all parties and has secured recommendations from the Culture, Media and Sport Committee and the Welsh Affairs Committee.

Dermot King, MD of Butlins and chairman of the Campaign to Cut Tourism VAT, said: “There is now deafening support from across the UK and the political spectrum for the government to recognise the distinct needs of the hospitality and tourism sector. The UK is at a major competitive disadvantage to European competitors, ranking 140th out of 141 on world price competitiveness. A reduction in tourism VAT could be brought into effect immediately, as there is no need for legislation at the national or EU level.”

King continued: “I’ve already called on the government to reduce tourism VAT during school holidays to test our conviction that cutting this tax would help businesses and the public and in the long term the Treasury.”

Eddie McKeever of McKeever Hotels Group, which operates both in Northern Ireland, where tourism VAT is at 20%, as well as the Republic of Ireland (where tourism VAT is at 9%, said: “As a family business that operates on both sides of the border I’ve been surprised at the difference it makes.  The 11% VAT gap between Northern Ireland and the Republic of Ireland has benefitted my business and guests in the Republic.  As a result, I’ve been able to secure more jobs than initially forecasted and has created further jobs in the local community.  I hope the UK government will now understand the benefit and opportunities of reducing tourism VAT. “

A recent review by Dr Andrew Sentance CBE, a former member of the Bank of England Monetary Policy Committee, concluded that reducing tourism VAT would be the single most effective taxation reform for stimulating growth.

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