Hamilton Seeks Reduced VAT Rate for Hospitality Sector
10 September 2012
Strangford DUP MLA Simon Hamilton will today (Monday) seek Assembly support for a motion calling on HM Treasury to consider reducing the rate of VAT for some tourism related services.
Commenting in advance of the debate, Simon Hamilton said,
“I am bringing this motion to the floor of the Assembly today to press the Executive to make serious representations to HM Treasury in London that we need a reduction in the VAT rate for the hospitality sector right across the UK and especially in Northern Ireland.
A reduced rate of VAT for tourism related services across the United Kingdom could have a tremendously beneficial impact on our economy.
It is estimated that a cut to 5% could create over 3,000 jobs and contribute significantly to achieving the targets for tourism set out in the Programme for Government and Economic Strategy. The evidence from around Europe where 13 member states including the Irish Republic of the EU have reduced VAT for restaurants and catering services is that whilst there is a natural initial reduction in the overall tax take, in the long term the benefits to the economy flow with trade up, new businesses opened, jobs created and other tax revenues rising.
The Executive has invested massively in our tourism infrastructure with the likes of Titanic Belfast and the new visitor centre at the Giant’s Causeway and Northern Ireland’s tourism potential is undoubted. Just think what it would do to the sector to have a reduced rate of VAT as well.
A vibrant and healthy hospitality sector is essential to our economy. Our land border with the Irish Republic - and it’s recently reduced VAT rate - puts us at a distinct disadvantage when it comes to the VAT our pubs, hotels and restaurants across Northern Ireland have to pay. A reduced rate would mean that this cut could be passed on to customers or used to upgrade facilities to improve the tourism offer.
With the Coalition Government at Westminster talking about refocusing on economic growth, this is the sort of stimulus measure they should seriously consider as a means to create jobs and boost a pivotal sector in our economy.
The Executive recognises that being competitive is at the centre of rebalancing our economy and any influence we can exert on Her Majesty’s Treasury to make this a reality must be taken. That is why I am calling on all parties to support the motion so that we are united on securing a positive economic lever.”