Tourism VAT rate cut would boost Northern Ireland ‘s coffers

25 September 2017 by
Tourism VAT rate cut would boost Northern Ireland ‘s coffers

Northern Ireland's balance of payments would be boosted by a total of £332m more than years if VAT on accommodation and visitor attractions was slashed, according to an independent report published today.

A VAT cut from 20% to 5% would also make Northern Ireland's hospitality and tourism industry more competitive in the global marketplace and create more than 2,000 jobs across the hospitality sector.

These were the findings of the report, carried out by Nevin Associates, to discover the impact of VAT on tourism in Northern Ireland separate from the rest of the UK.

It discovered that a VAT cut on hotels and other accommodation would result in a loss of treasury income of £4.2m in the first year. However over five years, the treasury would gain by £32m and by £109m over a 10-year period.

The study also showed that in the Republic of Ireland, which has a 9% tourism VAT rate, average spend per visit is £350, almost double the £186 average spend in Northern Ireland. Almost 80% of the Republic's visitors come from overseas, whereas the majority of Northern Ireland's visitors are from other parts of the UK.

Speaking at the launch of the report at the Europa Hotel Belfast, Colin Neill, chief executive of Hospitality Ulster, said that it was time that "our ridiculously high VAT rate was reduced in line with many other countries, including the Republic of Ireland", adding that 19 EU countries have tourist VAT rates below 10%.

He continued: "This is why the research by the UK Treasury, promised as part of the Conservative / DUP Confidence and Supply agreement is so important and why we must ensure the Treasury don't create a research model that is designed to reinforce their existing stand against a cut."

The UK-wide Campaign to Cut Tourism VAT, which is supported by the British Hospitality Association, Hilton Worldwide, Premier Inn Travelodge and many other companies, has long argued that a reduction in the rate to 5% will stimulate investment and consumer spending, with a contribution of £4.6b to the Exchequer over 10 years and a reduction in the UK's balance of trade deficit by £23b during the same period.

Butlin's boss: tourism VAT cut can happen >>

BHA hopes DUP deal with government will lead to tourism VAT cut >>

Third parliamentary select committee calls for tourism VAT cut >>
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