UKH backs long-term reduction on tourism VAT

UKHospitality said it has welcomed cross-party support for a long-term reduction in tourism VAT that was revealed in yesterday’s (10 September) Backbench Business debate in the House of Commons.

It said that hospitality and tourism businesses have welcomed the Government’s earlier decision to reduce VAT to 5% until January 2021, adding this was widely viewed as a “boon” for the hospitality sector post-Covid-19 lockdown.

Prior to the cut, the UK’s rate of VAT for accommodation and tourism attractions was approximately twice the average of other major European destinations such as Spain, Germany and Italy, according to UKHospitality. 

It added that this was imposing higher costs and stifling demand in the sector.

Now, however, MPs from the Conservative Party, Labour, the SNP and Liberal Democrats have suggested that an extension of the VAT reduction beyond January would be an effective way to protect businesses over the winter and stimulate the UK’s tourist economy.

UKHospitality CEO, Kate Nicholls, said: “The expression of so much cross-party backbench support for extending the VAT cut is a very positive signal that the value of hospitality and tourism is rightly being recognised. 

“As we move away from the peak tourism season, it is encouraging to see all parties looking at ways in which the Government can support these vital sectors through the winter.” 

She added: “A permanent cut in VAT would level the playing field with the UK’s international competitors, enabling tourism and hospitality businesses to survive over the winter, before helping to drive the UK’s economic recovery in 2021.”

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