CEO tells NI Select Committee VAT reduction across UK could add jobs and boost NI tourism revenue

03 December 2015

Colin Neill, Chief Executive, Hospitality Ulster is expected to tell the Northern Ireland Affairs Select Committee at Westminster today that the potential positive economic impact of a reduction in VAT for the hospitality industry in the UK and Northern Ireland is a significant one.

Speaking to the Select Committee as part of its inquiry into how Northern Ireland can promote tourism through an examination of the tax system, the Committee is looking at how a VAT reduction across the UK can boost tourism numbers, revenue and employment in the hospitality and tourism sectors.

“Currently 25 of 27 EU countries have reduced tourism VAT. The UK’s current rate of 20% is almost twice the European average which undermines competitiveness against countries with lower rates of VAT.”

“The UK is ranked 140 out of 141 countries for price competitiveness in tourism. The price sensitive nature of the tourism industry means tourist businesses in the UK are losing out to our European counterparts due to the high level of VAT.”

“Northern Ireland is the only part of the UK to have a land border with an EU member state - the Republic of Ireland – which has a tourism VAT rate of 9% on accommodation, food and visitor attractions. A situation further exacerbated as the Republic of Ireland is our largest market and closest competitor.”

“There is no doubt the potential impact of a reduction in tourism VAT in Northern Ireland is significant. Based on the experience of the Republic of Ireland we can predict the growth a reduction in tourism VAT would have in Northern Ireland over a similar timeframe of 3 to 4 years. The potential to increase current total visitor numbers to around 5million, increase total revenue to over £850million, and increase employment within tourism to over 50,000 is a real one.”