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The Cut Tourism VAT Campaign is firing on all cylinders

Profile Photo By: British Hospitality Association
December 10, 2012

The Cut Tourism VAT Campaign is firing on all cylinders

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The Cut VAT Campaign is firing on all cylinders with lots of media coverage over the weekend. Ufi Ibrahim said: ?We?re missing out on tourists from growing markets like China and Russia because of the high VAT rate and restrictive visa regime. Tourism is the only export industry to pay VAT, and cutting the rate to five per cent will allow us to compete effectively with our international rivals and boost growth. Tourism?is a great British success story. We offer accessible employment in difficult times, and securing this VAT cut will help provide young people with jobs when one in five 16-25 year olds are currently unemployed.?

Find out what the BHA has been doing to support members Campaign to Cut VAT

Open Letter to the Chancellor

Dear Chancellor,

This has been a challenging year for the UK. The pride of the Diamond Jubilee and outstanding success of the Olympics has been countered by a double-dip recession and on-going high unemployment.

The UK is better placed than any country in the world to use its tourism industry to boost the economy. We were disappointed this was not reflected in the Autumn Statement.

By keeping the rate of VAT charged on tourism at 20 per cent, we risk missing a golden opportunity to capitalise on our nation’s global brand and generate jobs and growth.

As you look to 2013, we urge you to consider the opportunity at stake, and move to reduce the rate of VAT charged on visitor attractions and accommodation to five per cent ? in line with our international competitors.

The Treasury has very kindly invited us to use its own models to evaluate the impact of a VAT cut on the UK economy. The case for a reduction is clear.

Treasury models predict that a cut would be revenue neutral and contribute ?4 billion each year to the UK economy. Deloitte research also shows that the reduction in VAT would create 80,000 jobs.

The case is made even more robust in that it is the only export industry to be hit with a levy. This is despite tourism being the UK?s third largest export, earning ?17.7 billion in foreign currency each year.

We are also the only major tourist destination in Europe not to exploit the EU?s rules and reduce the rate of VAT charged on tourism.

In 2005 David Cameron said the government wanted to see the UK move up the league table for international visitors to fifth place. Since then the UK has slipped to seventh place ? behind Turkey.

We lag behind Germany in attracting Chinese tourists, and internationally we are ranked 135th out of 139 on the competitiveness of our sector.

It doesn?t have to be this way. This year has demonstrated the unique attraction the UK enjoys internationally. Let?s not squander this by levying VAT on our oversees visitors.

Signatories

  • Graham Wason, Chair, Campaign for Reduced Tourism VAT
  • Ufi Ibrahim, Chief Executive, British Hospitality Association
  • Nick Varney, Chief Executive, Merlin Entertainments
  • Dermot King, Managing Director, Butlins
  • Bernard Donoghue, Director, ALVA
  • Rhys Roberts, Chairman, Best Western GB
  • Simon Vincent, President, EMEA – Hilton Worldwide
  • Thomas Dubaere, Managing Director, ACCOR UK-IRL
  • Paul Kelly, Chief Executive, BALPPA
  • Grant Hearn, Chief Executive, Travelodge

Click HERE to visit the Cut Tourism VAT Campaign website

Source: BHA

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