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Farron: Government should look at VAT cut for tourism sector

June 10, 2014 2:02 PM

Tim in WestminsterSouth Lakes MP Tim Farron has thrown his weight behind calls for a VAT cut for the tourism sector. Tim recognises the critical role that tourism plays for the local economy in the Lake District.

Cut Tourism VAT, which calls for a reduction in VAT for hotel accommodation and other related services from 20% to 5%, is spearheaded by Bourne Leisure Group, Merlin Entertainments Group and the British Hospitality Association. It is supported by more than 500 businesses.

Most EU Member States apply a reduced VAT rate to tourism services. Ireland by contrast to the UK has 9% VAT on accommodation, France 10% and Spain is also 10%. Tim has signed an Early Day Motion calling for a VAT reduction for the hospitality industry. Tim thinks that a tax cut could boost trade, create jobs and help our tourism sector compete with other European destinations. He has asked the Treasury to bring tax rates into line with other European countries.

Last year Tim tabled a written question on the subject in the House of Commons. He asked the Chancellor of the Exchequer "if he will consider reducing the rate of VAT charged to hotels in the UK for the purposes of enabling them to run their businesses at similar levels of taxation to hotels in other EU countries?"

Tim said: "Local hotels and B&Bs are the backbone of our economy and I think they need more help and support.

"Recently I helped secure funding to help advertise the Lake District and I continue to lobby to get the Government to turn us into an 'attack brand' for UK tourism. However I think we can do even more. I would like the Government to look at the impact of cutting VAT for the tourism industry, because I think it could boost trade and support our local economy."