We support the campaign to cut VAT for all tourism related businesses in the UK. Most EU countries charge reduced rates of sales tax for all hospitality businesses.
In the UK, we add 20% tax to all our customers’ bills. In France, Spain & Italy, hotel accommodation and restaurant sales attract only 10% tax. In Ireland, it’s only 9%.
A reduced rate of VAT would
- Generate higher levels of employment, with increased wage levels and training. These benefits would occur throughout the age and socio-economic spectrum and throughout the UK.
- Increase additional tax receipts as a result of this additional employment with consequential savings on social security payments.
- Increase profits, corporation tax payments and shareholder dividends.
- Lead to further investment in the industry, improving overall quality and therefore further improving the UK’s competitiveness.
- Feed through to higher expenditure in other sectors of the economy, which in turn will generate further tax receipts – the ‘tourism multiplier’. Every additional £1 of tourism expenditure generates 70p of extra expenditure in other sectors of the economy
The hospitality industry is very important to us here in Cornwall. Detailed fiscal models commissioned by the campaign show that a VAT cut could be done today, at a net fiscal GAIN of £2.5bn after 10 years for the UK Treasury. Show your support and join the campaign at the Cut Tourism VAT website.