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UK Hospitality Managers – your MP needs you! Lobby your MP now to cut Tourism VAT!

UK Hospitality Managers – your MP needs you! Lobby your MP now to cut Tourism VAT!

December 2015

Hoteliers and hospitality business owners and managers – you’ve got a major role to play in helping the British Hospitality Association (BHA) to bring its vitally important ‘Cut Tourism VAT’ campaign to a successful conclusion.

This was the message that came across loud and clear from BHA Chief Executive Ufi Ibrahim, when she was interviewed recently by HOSPA Chief Executive Carl Weldon at this year’s HOSPACE Conference and Exhibition for Hospitality Finance, Revenue Management and IT Professionals. She told a record number of 470 delegates that a very senior industry leader had told her, in light of the Chancellor’s Autumn Statement, that he could not envisage that a cut to Tourism VAT was going to take place, certainly within the next two years, and the BHA should move on. “I disagree,” she replied with conviction, explaining that to pass the motion to cut tourism VAT, the BHA needed a target number of 326 MPs, and the campaign was already well on track to achieving this goal – with 137 MPs, across all parties, currently actively championing the cause.

Yes, she said, it would probably take another couple of years to get the necessary support of 326 MPs, but the key to achieving this target was for everyone in the hospitality industry to lobby their MPs at constituency level and educate them about the importance and the very positive outcomes of cutting tourism VAT. So it is up to all of us to answer the BHA’s rallying call to the industry and convince our local MPs to support this vitally important campaign!

Why should we do this? According to the BHA, a cut in Tourism VAT will make the UK more competitive for attracting domestic and international tourism with the rest of the EU; it will boost GDP by £4bn a year; it will increase 120,000 jobs; and deliver £3.9bn to the treasury. Whilst the UK VAT rate is 20%, the average EU tourism VAT rate is 10.6%; whilst countries such as France, Italy, Spain and Eire have VAT rates under 10%. Indeed, Ufi cited the example of what a cut in VAT has done for Eire in comparison to its UK counterpart Northern Ireland. In Eire, where the VAT rate is 9%, business has grown by 21%; whereas in Norther Ireland, with a 20% VAT rate, business has declined by 18%. “If we are uncompetitive, then we will underperform,” said Ufi.

So local and national hoteliers and hospitality managers, this is your chance to help your industry and the BHA. Target and educate your MP – then we will have a chance of achieving the support of the necessary 326 MPs to help make the vitally important tourism VAT cut a reality! To help you do this, please visit the ‘Cut Tourism VAT’ campaign website: . The BHA will equip you with everything from briefing documents and letters, to guidelines for lobbying your MP.

As a guide to help you, the BHA has drawn up the following list of benefits arising from the proposed cut in tourism VAT:

  1. Greater tax revenue:
  • Over time, more tax will be raised by the Exchequer – £3.9 billion over 10 years
  • Great spending and growth in tourism and the wider UK economy will produce UK GDP gains by up to £4 billion per year.
    1. Increased exports:
  • Tourism is the UK’s sixth largest export earner – reducing tourism VAT will increase UK exports and decrease imports.
  • It will halt the long-term decline in UK’s tourism balance of payments and improve the UK trade balance by £20 billion over 10 years
    1. Stronger regional growth and investment:
  • For every £1 of tourism spend, a further 70p is spent in the wider local economy.
  • It will generate more investment for regional businesses and support wider regeneration across the UK, especially in seaside and rural communities that rely heavily on tourism.
    1. Higher employment:
  • Reducing VAT on tourism will create 123,000 new jobs over 10 years.
  • As tourism is a key employer of young and lower skilled workers, reduced VAT will have far-reaching social and economic benefits, creating jobs around the UK.
    1. Encouraging tourism in Britain and increasing international competitiveness:
  • It will incentivise domestic and foreign tourists to choose Britain for holidays.
  • It will increase the attractiveness of the UK globally, which is currently ranked 140 out of 141 countries for price competitiveness in tourism.
  • It will be fairer and cheaper for consumers holidaying in the UK.

How would a VAT cut create growth across the UK? Unlike many industries, tourism benefits communities and economies around the UK and is, in many areas, a primary source of employment. In 2003 to 2014, domestic visitor numbers fell by 9% which puts us back to 2008 figures. A reduction in tourism VAT would:

  • Assist regions that have not recovered from the recession, especially those in rural and coastal areas.
  • Support 2.4 million jobs outside London.
  • Support SMEs, which make up over 80% of all tourism and hospitality businesses.

So hoteliers and hospitality business owners and managers, there’s no time to lose – contact your MP now!


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