VAT rise impacts on UK tourism
14-Jan-10by Annie Byrne
Research released by VisitBritain’s online resource for tourism accommodation businesses, Accommodation Know How, shows the end of the temporary VAT reduction will have an adverse affect on UK tourism. The results shows that, when compared to other top tourist destinations like the US, Spain, Italy and Australia, visitors to the UK are paying about 10 per cent more for accommodation and restaurants and 3.5 per cent more on attractions and other items. It also claims that it will reduce the UK’s attractiveness to tourists compared directly to mainland Europe. France recently lowered the VAT rate for its restaurants from 19.6 per cent to 5.5 per cent, and Germany will be lowering its VAT rate on accommodation from 19 per cent to 7 per cent. And another report from the British Association of Leisure Parks, Piers and Attractions says that the loss to the Exchequer due to the lower VAT rate could easily be made up by the increased income that tourism could potentially bring, as well as savings in social security payments. “A reduction in the level of VAT for visitor attractions and accommodation could provide a tax positive boost to the Treasury of around £600m and provide circa 23,000 jobs,” says CEO of the BALPPA, Colin Dawson.