Lib Dems back tourism VAT cut

The Liberal Democrats yesterday (September 20) became the first main political party to call for a cut in the rate of VAT on domestic tourism from 20% to 5%.

The party adopted the new policy to reduce VAT on visitor accommodation and attractions and its annual policy-making conference held in Bournemouth.

Tim Farron, leader of the party, said: “Local hotels, B&Bs and tourist attractions are the backbone of our economy and I think they need more help and support.

“I would like the government to reduce VAT for tourist attractions and accommodation to boost UK exports, create more jobs and support our local economy.”

The Cut Tourism VAT campaign claims that if the policy is adopted nationwide it would be worth £4bn to the UK economy and create 123,000 jobs.

Martin Horwood, the former MP for Cheltenham, said that the policy would level the uneven playing field, help small businesses, grow the economy and create jobs over time whilst delivering a net benefit to HM Treasury.

The campaign has so far been supported by more than 125 MPs from across the political spectrum and an All Party Parliamentary Group has been created to lobby the policy.

Ufi Ibrahim, chief executive of the British Hospitality Association (BHA), said: “This decision by the Liberal Democrats reflects the growing political support for our campaign. Tourism is the UK’s only major export subject to 20% VAT – double the rate of the EU average.

“The UK’s Tourism deficit has been in excess of £10bn for far too long. It’s time to ensure tourism taxes do not deter more Britons from enjoying the UK staycation, and do not impede our ability to attract greater numbers of international visitors, especially beyond London.”

The UK has the second highest rate of VAT on hotel accommodation in the European Union and is one of only three EU member states that have not reduced VAT on accommodation and attractions.