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BHA calls for VAT cut as prime minister enjoys low-rate Swiss break

11 August 2016 by

The British Hospitality Association has urged the prime minister to consider reducing the UK's rate of tourism VAT as she enjoys 3.8% on hotel accommodation in Switzerland.

Theresa May is currently holidaying in the Swiss Alps, a location she has visited many times and a country that has been construed as being neutral in terms of Brexit symbolism.

Though May has dodged any accusations of divided loyalty by holidaying in a non-EU member country, she has given the BHA an opportunity to raise the issue of VAT by contrasting the UK's 20% rate with that of Switzerland, which imposes just 3.8% on hotel accommodation.

BHA chief executive Ufi Ibrahim said: "At 20%, the UK's rate of tourism VAT is more than five times that of Switzerland. Switzerland has some of the highest mountains in Europe and we have some of the highest tourism taxes.

She added that the fall in the value of the pound was likely to help support UK tourism, but that the industry cannot rely on currency fluctuations to bolster tourism.

"A reduction in tourism VAT would create 123,000 jobs and improve the UK's trade balance of payments by £20b over 10 years and generate investment for regional businesses right across the country," Ibrahim said.

"As the prime minister enjoys her holiday abroad, we urge the Government to lower the rate of tourism VAT to 5%, so that those millions who choose to holiday at home this summer are not unfairly disadvantaged by the UK's disproportionately high rate of tourism VAT."

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